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Ghana’s Next Eurobond Probably In Early 2016   
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Ghana's next Eurobond will likely come early next year as the "window is closing" for a planned 2015 issue, the finance minister said on Friday, adding that he targeted a maturity of 15 years.

Seth Terkper also told Reuters that China would remain an important source of financing for Ghana and other African countries while fiscal consolidation, under an International Monetary Fund (IMF) programme, was on track.

Until recently one of Africa's star economies, Ghana has stumbled this year with the cedi currency slumping around 20% and public debt reaching 69% of GDP at the end of September.

But Ghana has continued to borrow on international markets, selling a $1 billion Eurobond at a 10.75% coupon rate in October. Terkper said at the time another bond could be sold by year end.

He said, however, he was aware the "window is closing".

"The chance of doing an issue this year is less, so we may be planning going in the next year," he said in an interview. "We don't have a definite time, but we would prefer to go earlier."

Terkper said the issue would be more than $500 million, but declined to give more details on the size, noting that the final decision was due after the budget is finalised. He added that a 15-year maturity would be desirable.

"I want to stabilise the impact of debt service on the budget, and even though the interest would be slightly higher on a longer tenor, it serves our purpose better," Terkper said.

"It also takes me out of the domestic market ... the reliance on short tenor which is basically domestic and leading to crowded and high interest rates," he said, referring to the local cedi bond markets where one-year yields are around 25%.

Ghana has also turned to China for financial support, especially for infrastructure projects, and its President, John Mahama, this week met Chinese President Xi Jinping at a summit in Johannesburg.

Xi told African leaders on Friday Beijing would pump $60 billion into development projects on the continent, cancel some debt and boost agriculture as part of a three-year plan.

China, which has helped Ghana with gas processing and dam projects, will remain a source of funding, Terkper noted.

"Whenever there are funds available to the continent, for sure, we like to look at the prospects for using those funds," he said.

"One, because it helps diversify our sources of financing; secondly, China is one of the countries which has strong national institutions, particularly Exim and (China Development Bank) that provide financing on a very long term."

Ghana's gross domestic product (GDP) growth has slowed sharply in the last two years due to lower COMMODITY PRICES but is expected at 4.1% in 2015, with recent upward revisions. Terkper said that had helped revenue collection and would leave fiscal performance on track.

While the 2016 budget deficit target is 5.3% of GDP, Terkper said he saw a 3.5-4% deficit as the goal further down the line.

"That is where we should be. It will take some effort but we think that the consolidation ... is on course despite some setbacks," he added.
Source: The Finder

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