Ghana will issue a new five-year domestic bond to raise 500 million cedis ($125.62 million) on Feb. 25 to finance government programmes in the 2016 budget.

Finance Minister Seth Terkper disclosed this last Thursday.

The country is seeking cheaper ways to finance its debt and spending as it follows a three-year aid programme with the International Monetary Fund to remedy a high deficit, inflation above target and a widening public debt.

February's bond, open to offshore investors, will mainly target institutional investors such as pension funds and unit trusts under a 'book-runners' system the government introduced last year.

"It's a new issue we want to take from the market," Samuel Arkhurst, head of debt management at the Finance Ministry told Reuters, adding that the proceeds will be used to support government's finances.

Ghana paid a yield of 24 percent on the last five-year debt issued under the book-running system arranged jointly by Barclays Bank Ghana, Stanbic Bank Ghana and Strategic African Securities last November.

Interest rates in Ghana are among the highest in the region, reflecting the fiscal challenges facing the economy. The yield on its weekly benchmark 91-day Treasury bill stood at 22.7521 percent on Feb. 5.

Finance Minister Seth Terkper told reporters on Tuesday the government was pursuing a new management strategy to reduce its public debt, which currently stood around 70 percent of GDP in November. Consumer inflation stood at 19 per cent in January.