By this, the ministry explains that the move has created some fiscal space for government to channel the funds to other critical sectors of the economy.
Speaking at the Capital Market Week Celebration in Accra, a Deputy Minister of Finance Charles Adu Boahene disclosed that government was so financially vulnerable at the time such that it became a price taker for the bond.
“We encountered a situation where under every month we had about a billion cedis of treasury bills maturing and either you found a billion cedis to pay them off or you have to roll them over and so that means you have about 4 billion a month in maturing securities which clearly, we don’t generate enough revenue to be able to pay along all the other things that we have to pay,” he observed.
Mr. Adu Boahene pointed out that government had to quickly take some fiscal decisions to restructure the debt portfolio to make it sustainable.
He maintained the situation was unbearable since government was forced to take the price of investors anytime it wanted to roll over the interest payment on the debt.
“We were very dependent on the market to agree to roll over their debt stock and of course, they have the power to determine the price and so we saw the pressure on interest rates keep going up to reflect the fact that we were at the mercy of the investor base,” he said.
By: Lawrence Segbefia/citibusinessnews.com