International
banks have pledged to lend Ghana $1 billion for budget purposes and to boost
central bank reserves as the country seeks to cut its fiscal deficit and
stabilize the local currency.
This is according to Bloomberg.
The country raised $750 million through
syndicated loans with the participation of about eight African and European
banks and $250 million from multilateral lenders, according to two people
familiar with the transaction, who didn’t want to be identified because the
deal is not yet public. Standard Bank Group Ltd., Standard Chartered Plc and
Rand Merchant Bank Ltd. led the arrangements.
The
transaction is the first part of $2 billion in syndicated loans that Ghana
targets to raise this year to stabilize its finances and financial markets.
Ghana lost access to Eurobond markets this year due to higher debt and budget
deficit levels, caused by the impact of the coronavirus pandemic.
The country, which aims to cut its budget
shortfall to 7.4% of gross domestic product this year from an estimated 12.1%
of GDP, will dedicate $750 million of the syndicated loans to the budget, for
expenses and liability management, the people said. The rest will go to the
Bank of Ghana to beef up its resources for swap deals, they said.
Ghana’s debt ratio rose to 78% of GDP at the
end of March, from 66.3% of GDP a year before. The cedi lost 22% against the
dollar this year compared with 1% appreciation for the same period a year ago.
The
deal will likely be presented to parliament next week for approval, the people
said.
The country will consider the second tranche of
$1 billion in the latter part of the year, after the mid-year review of the
budget and taking into account the impact of the electronic transactions levy,
oil and food prices, as well as geopolitics, they said.
Spokesperson to the Finance Ministry, Cecilia
Akwetey was unable to immediately comment when contacted by phone and text
message. A spokesman for the Bank of Ghana, who asked not to be identified,
said he couldn’t immediately comment when contacted by phone.
Source:bloomberg