The Medium Term Debt Strategy (MTDS) is based on the debt management objectives as stated in Section 58 of the Act 921 and it concerns the following: ensuring that the financing needs of Government for the medium term are met on a timely basis; borrowing costs are as low as possible and consistent with a prudent degree of risk; promotion of the debt market and pursuing any action considered to impact positively on public debt.
The Medium Term Debt Strategy (MTDS) is based on the debt management objectives as stated in Section 58 of the Act 921 and it concerns the following: ensuring that the financing needs of Government for the medium term are met on a timely basis; borrowing costs are as low as possible and consistent with a prudent degree of risk; promotion of the debt market and pursuing any action considered to impact positively on public debt.
As part of the measures to reduce risk, Government will pursue liability management of the debt portfolio based on non-distressed debt transactions. This could indirectly affect cash flows from government fiscal operations when the timing of Liability management coincides with negative carry on idle cash.
This MTDS covers the period 2021 to 2024. The strategy considers the costs and risks embedded in the current debt portfolio; future borrowing requirements for the medium term, the 2021 macroeconomic framework, the prevailing market conditions and other factors necessary to develop the strategy. This is in fulfilment of the statutory requirements in Section 59 of Act 921.
The macroeconomic framework of Ghana for 2020 was on a favourable path with macroeconomic stability restored and fiscal consolidation gaining root and consistent with a monetary policy stance that had supported a strong external sector development.
In addition to this, the financing conditions for the Government was favourable, which supported growth (even with the COVID-19 pandemic) and inflation within the targeted corridor.
Investor sentiments were high and their interest was once again heightened for Ghana’s Eurobond issuance in February 2020 resulting in a size of US$ 3.0 billion.
The COVID -19 pandemic hit Ghana around March 2020 and this adversely affected the economy’s positive economic performance. Consequently, the original MTDS had to be recalibrated to ensure the financing gap of government is met.
This included the IMF Rapid Credit Facility of GHS 5.6 billion (1.45% of GDP); African Development Bank Funding of GHS 389.7 million (0.1% of GDP), European Union of GHS 504 million (0.13 % of GDP); the Bank of Ghana Asset Purchase Programme of GHS 10 billion (2.61% of GDP); and the World Bank funding of GHS 1.1 billion (4.6% of GDP).