Thursday 8th September, 2016 Following from our prior roadshow in August 2016, when we indicated that we would continue to monitor markets with a view to a potential new Eurobond issue and our subsequent completion in early August 2016 of a ~US$100 million tender offer in respect of Ghana’s Eurobonds due 2017, we have today announced a prospective new Eurobond issue and any and all tender offer in respect of the outstanding Eurobonds due 2017.
UPDATE ON 3RD REVIEW OF THE 3 YEAR ECF PROGRAMME WITH THE IMF
1. The IMF Executive Board was expected to review and approve Ghana’s economic performance under the Third Review in June 2016. After the Mission in April/May 2016, a number of prior actions were introduced by the IMF and including in particular:
a. approval of the Public Financial Management Law by Parliament;
b. approval of the amended Bank of Ghana Act by Parliament; and
c. strategy to address the debt and financial situation of SOEs;
2. To expedite action towards the ultimate completion of the Third Review by satisfying these new prior actions, several of which are structural in nature, Government gave the completion of these activities its top priority. This resulted in the extension of the last sitting of Parliament and passage of all the bills as required by the IMF. As clearly demonstrated by the agreement to restructure a substantial portion (GH¢2.2 billion) of VRA’s debt, government has started taking action to address the financial situation of the SOEs. The on-going restructuring of the energy sector SOE debt involves 12 major domestic banks.
3. After meeting the above mentioned prior actions, the IMF indicated at the time, a new Board date could be scheduled for mid-September, 2016. However, the Board would have to be apprised of current economic developments up to June, 2016. A follow-up Mission, therefore, took place from Monday, August 29 to Friday, September 2, 2016.
4. At the end of this follow-up mission, the team was:
a. provided with updated data;
b. given an update of the SOE debt restructuring plan;
c. informed of the validation of the legacy debt to be paid from the energy levies;
d. informed that the Government would expand the scope of the energy sector audit validation program to cover their future viability, based on a review of business plans;
5. It is important to note that, the Third Review considers economic performance up to end December 2015. During the period under review, Ghana broadly satisfied the fiscal quantitative performance criteria in spite of a challenging economic environment.
6. The IMF was satisfied with the developments made by Ghana. Notwithstanding this, the various laws that needed Presidential assent were ready on the final day of the Mission. This requires the IMF to now study the entire set of laws, and potentially communicate a new target board date. Nevertheless, the Mission has been assured by His Excellency the President of his willingness and commitment to ensure the success of the program.
7. In this regard, His Excellency the President has also assured all Ghanaians and stakeholders that Government is not under pressure to overspend and neither are we considering any spending that will not allow the country to meet the fiscal deficits set for the year. Expenditures have already been rationalized to meet the crude oil prices and market financing activities have been robust enough to provide the necessary cushion to forestall any financing from the Bank of Ghana. This, has been, exonerated by the year to date zero financing by the Bank of Ghana.
8. The Government believes that Ghana’s economic prospects remain on the positive trajectory with TEN oil field commencing production in August 2016 and inflation decreased in July to 16.7% from 18.4% in the June.