Ghana plans to raise up to $ 1 billion through the sale of sustainable bonds, including Africa’s first social debt to fund a flagship policy to expand access to education.
The proceeds from the sale would help refinance domestic debt used for social and environmental projects, including loans taken to pay for the government’s policy on free high schools, Finance Minister of State Charles Adu Boahen said on Monday. at Bloomberg.
The use of social bonds has exploded since the coronavirus pandemic, but so far only a few sovereign issuers have sold them, including Chile and Ecuador.
The European Union has emerged as the main player in funding a job boosting program, breaking records for global debt demand as investors flock to ethical assets.
“With this problem, we are looking to refinance these debts already raised to undertake projects in the environmental and social sectors,” said Adu Boahen.
“Of everything we’re going to raise with our mandate in the capital markets this year, only $ 1.5 billion in new debt, the rest is for refinancing or buyout.”
The sale, likely to be a mix of social and green bonds, reportedly comes months after Ghana sold four-year zero-coupon debt to international investors in a $ 3.025 billion Eurobond deal which also included 20 years, 12 years and seven years. – without titles.
The country has mandated Bank of America Corp., Citigroup Inc., Standard Chartered Plc, Standard Bank Group Ltd. and Rand Merchant Bank Ltd. as the main organizers of the operation.
The government will use some of the same advisers for the issuance of sustainable bonds, Adu Boahen said, without giving further details.
This will help close a budget deficit in Africa’s top gold producer, which is expected to account for 9.5% of gross domestic product this year, up from 11.7% in 2020.
The administration of President Nana Akufo-Addo has had to increase the number of places in public high schools since it started implementing free education at this level in 2017.