Ghana opening 2-Year bonds to Foreigners, plans 10-year sale

Ghana is set to open auctions of two-year bonds to foreign buyers, seeking to draw more offshore funds for its budget as the West African nation makes plans to offer longer-dated cedi-denominated notes.

Foreigners are currently allowed to only buy domestic bonds with terms of three years and higher.

“Our objective now is to try to do more medium- to long-term bonds and less of short-term ones,” Donyina-Ameyaw said. “We don’t want to use the 91-day Treasury bill up to the one-year note, which are classified as short term, for capital expenditure anymore.”

The world’s second-biggest cocoa producer is trying to narrow its budget deficit to 8.5 percent of gross domestic product this year from 10.2 percent last year that according to the ministry missed a target of 9 percent.

Even after using $750 million from a sale of Eurobonds in July to boost foreign reserves, the cedi weakened 20 percent against the dollar in 2013. It gained 0.3 percent to 2.3457 by 12:39 p.m. in Accra.

The second-biggest economy in the region will probably debut 10-year notes near June, The longest cedi bonds Ghana currently offers have seven-year tenures and yields on the notes sold in November traded at 19 percent on Wednesday, according to data from Standard Chartered Plc.

Bank of Ghana Governor Kofi Wampah in November suggested to the ministry it consider opening one- and two-year notes to foreign investors.

The central bank plans to increase issuance by 35 percent in the first half of the year, according to a statement in the Ghanaian Times.

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