The government could turn to the Bank of Ghana for financing if it fails to enter the international capital market next year to issue a Eurobond, international research institution, REDD Intelligence has said.
This is coming despite the Governor of the Bank of Ghana, Dr Ernest Addison, ruling out a provision of more loans to the government to help narrow the budget shortfall, saying, it would put exchange rate stability at risk.
But REDD Intelligence says the lack of Eurobond financing raises the questions of which other funding sources are available for the government to finance the budget deficit and upcoming debt maturities.
The Central Bank, according to REDD Intelligence, had stated in September 2021 that it had an understanding with the Ministry of Finance that a third of $1 billion Special Drawing Rights from the International Monetary Fund is on-lend to the government.
To this end, REDD Intelligence said the Governor had directed the Central Bank’s research department to make the necessary adjustment and not to classify that type of financing as central bank financing because of the source of funding.
Credit | REDD intelligence