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Ghana considering $50 bln century bond, president says

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Ghana may issue a 100-year $50 billion bond as part of a long-term industrialisation plan that aims to wean the West African country off aid, its president said during a meeting with Chinese President Xi Jinping.

The government, in power since January 2017, has said it needs about $2 billion a year for infrastructure spending. Ghana, which exports cocoa, gold and oil, is in its final year of a $918 million IMF credit programme.

President Nana Akufo-Addo said during a meeting with Xi in Beijing on Sunday:

“The Ministry of Finance and economists in Ghana are looking at floating a $50 billion century bond. This will provide us with the resources to finance our infrastructural and industrial development.”

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The announcement drew scepticism in financial markets, with analysts expressing doubts over Ghana’s capacity to undertake such a transaction.

“While the estimate of Ghana’s likely infrastructure investment need over the next century may well total more than $50 billion, Ghana’s ability to raise anything like $50 billion in a single issue is doubtful, given the country’s current financing capacity,” said Standard-Chartered Bank chief economist Razia Khan.

Deputy Finance Finister Charles Adu Boahen told Reuters discussions on the bond were at an early stage and that the plan was to raise the amount over a period and possibly in different currencies based on investor appetite and planned uses.

Akufo-Addo’s delegation also finalised a deal with Sinohydro Corp Ltd to provide $2 billion for government road and railway projects in exchange for refined Ghanaian bauxite, Nkrumah said.

The two countries also finalised a deal between China Harbour Engineering Company and Africa-focused private equity firm Helios on building a $350 million liquefied natural gas terminal in Ghana’s eastern Tema port.

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IMF Chief, Ceyla Pazarbasioglu, to visit China over Africa’s growing debt profile

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As the debt profile of many African countries continues to rise, the International Monetary Fund strategy chief, Ceyla Pazarbasioglu will travel to China next week for another high-level meeting.

Her travel is part of efforts to press the world’s largest sovereign creditor for quicker progress on debt restructurings for countries in need.

The IMF chief had called for debt restructuring arrangements for Zambia and Chad to be completed shortly.

Pazarbasioglu said it was critical to move forward and that “outreach to China next week is very important, at the highest levels.”

“It’s moving – very slowly, but it’s moving,” Pazarbasioglu said, noting that the participation of mining company Glencore Plc in the Chad treatment was also “a very good sign” that “even the most difficult private sector participants” were participating.

She said the Paris Club of official bilateral creditors had taken years to hammer out their debt relief processes, and China was learning, although she noted that the debt issues facing borrowing countries now were acute.

“The problem we have is that we don’t have that time right now because these countries are very fragile and dealing with debt vulnerabilities,” she said. “What we need is speed.”

Pazarbasioglu said the IMF would continue to press for changes to the Common Framework, including a freeze in debt payments when countries apply for a debt treatment, as well as clearer procedures and timelines for action, and ensuring comparable treatment for private creditors.

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Botswana central bank predicts fall of inflation rates, maintains monetary policy

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Botswana’s central bank has predicted that the country’s inflation rate will gradually fall back within its target range by 2024.

The bank is predicting that inflation will fall back within the 3%-6% range in the third quarter of 2024. The prediction has made it keep its monetary policy rate unchanged at 2.65% on Thursday.

The bank’s governor, Moses Pelaelo while speaking at a news conference said “the domestic economy will continue to perform below capacity in the medium term and therefore not pose any inflationary pressures.”

The inflation rate in the Southern African country dipped to 13.1% year on year in October from 13.8% in September but is still far above the central bank’s 3%-6% preferred band.

“The drop in inflation in the past months is due to the dissipating effects of previous increases in administered prices,” Pelaelo said.

According to the World Bank, Botswana’s reliance on diamonds and a public sector-driven model makes the economy vulnerable to external shocks, as diamonds contribute over 80% of total exports and are a major source of fiscal revenues.

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