Parliament fails to approve Sovereign bond 


Parliament, on Tuesday, could not approve the issuance of the 2016 Sovereign bond due a divided position by the two sides of the House. 

The one billion dollar sovereign bond is part of initiatives by government to provide cheaper and long term resources for financing the 2016 budget. 

The Minister of Finance, Seth Terkper in presenting the 2015 budget said government will deploy a number of fiscal and debt management initiatives aimed at achieving fiscal consolidation. 

The Finance Committee’s report indicated that government intends to fund the 2016 budget funding gap of three billion Ghana Cedis through the issue of the Eurobond. 

Due to market uncertainties however, the Ministry sort the approval of Parliament to issue a bond of up to one billion dollars. 
According to the Ministry of Finance, the bond issuance will have a neutral impact on the nation’s debt stock. 

Government intends to use seven hundred and 50 million dollars to support the budget and two hundred and 50 Million Dollars to refinance domestic and external debts.
  
The bond is expected to mature in 10 years. 
The approval of the bond was characterized with heated arguments. While the Majority highlighted the need to raise the Money, the Minority caucus was of the view that the nation should not continue on the borrowing spree. 

GBC