The government is probably not going to give Eurobonds at appealing yields in the transient regardless of whether it gets a International Monetary Fund support program this month or in the following two or three months.
In its February 2023 Africa Monitor Report, Fitch Solutions, said the increasing loan costs which has been climbed to 28% toward the start of last year make domestic borrowing more costly.
"To begin with, Ghana faces outer supporting limitations. To be sure, the nation has been cut off from the global capital market since late-2021 because of quelled financial backer certainty. While a normal IMF bargain in Quarter 1, 2023 will bit by bit further develop market opinion, it is far-fetched that the public authority will actually want to give Eurobonds at alluring yields for the time being".
"Likewise, the IMF program (expected to be valued at $3 billion north of a three-year time span) would just fund a piece of the designated shortage", it made sense of further.
Besides, Fitch Solution, said the increasing loan costs make domestic getting more costly, adding, "considering that Ghana as of now faces raised interest installments, a significant expansion in domestic debt issuance would debilitate financial elements further.
Besides, it said the domestic debt exchange programme would make domestic banks more wary in loaning to the government in 2023.
Regardless, it pointed that the government's expansionary spending plans will bring about a rising Gross-Domestic Product (G D P) ratio.
For sure, it anticipates that the public debt should Gross domestic product ratio to progress forward with a vertical direction until 2028 (coming to 94.4%), after which it will begin to direct.
Risks To viewpoint
It said there is a gamble that the IMF could communicate worries about Ghana's 2023 financial plan given the raised spending objective.
This could prompt the government reconsidering their financial plans, which would draw out the exchange process.