On Tuesday 4th of February, 2020, Ghana sold the largest ever Eurobond in sub-Saharan Africa. The country issued a $750 million tranche, which amortizes and has an average life of 40 years, at about 8.9 percent from an initial 9.4 percent. This makes it the highest-yielding sovereign dollar bond so far in 2020.

The bond was sold as part of a $3 billion deal that was almost five times oversubscribed. Premium investors which include Bank of America, JPMorgan, Morgan Stanley, Standard Bank Group Ltd., and Standard Chartered Plc arranged Tuesday’s sale.

The government also sold $1.25 billion of debt with an average maturity of six years and a yield of 6.375 percent. The third segment of $1 billion has an average life of 14 years, yielding 8 percent. Ultimately, bids topped $14 billion. 

This move is part of efforts made by the Ghanian government to cut down on borrowing from international financial institutions as the West African country had extensively financed its budget with borrowed funds.

In recent years, the Ghanaian government intensified moves to generate foreign earnings and offset its debts through diverse financial reforms, one of which was the Year of Return Initiative Ghana 2019. Launched in Washington, D.C by the President Nana Akufo-Addo administration in September 2018, the event marked 400 years since the first enslaved Africans touched Virginia, USA. 

The ultimate goal of the initiative was to encourage Africans in the diaspora to reconnect with Africa (specifically Ghana), familiarise with the continent, settle and invest in the continent. Ghana’s tourism sector projected to raise $1.9 billion from the event.

Last month, Ghana’s Finance Ministry also sought to raise over $3 billion from Africans in the diaspora to fund community projects in the country. The ministry hoped to raise the fund through the creation of a Diasporan Savings and Investment account also known as the African Sankofa Account. The recent issuance of the Eurobond is another significant move by the government.