News wires reported today that Ghana was planning a mid-year Eurobond bond to strengthen public finances. I wonder however, how the markets will price this bond on the back of some of the weak macro fundamentals we’ve witnessed over the last year with fiscal governance.
According to Ghana’s president John Dramani Mahama, “We need to solve this cyclical problem of losing macroeconomic stability during election years. There is pressure to spend huge amounts for infrastructure investments by government. Often when you yield to those pressures it moves the economy out of sync…One of the decisions we’ve taken is not to do everything on the public debt. For organisations, for projects, that have a revenue-generating capacity – let them borrow off their own balance sheets. We will use public debt only for most essential socio-economic aspirations”
Can we surmount the challenge of throwing fiscal governance through the window during election years? Let’s debate