The Ghana 2013 Eurobond Transaction

1. The Ghana 2013 Eurobond Transaction Press Conference on 12 August 2013

2. Goals • Diversify Sources of Funding • Consolidation of middle income status • Decreasing flow of concessional financing • Reduce the debt service cost and rollover risk of the Ghana 2017 bond • Reduce the cost of government financing • Current cost of domestic financing 19-21% • Improve tenor/length of financing the capital budget • Compare tenor of 3 or 5-year (or proposed 5-year) domestic bonds to the 10-year tenor for Sovereign Bond

3. Planned Use of Proceeds

4. The Process • Budget Proposal (March 2013) • Cabinet approval (April 2, 2013) • Parliamentary Approval (26 June 2013) • Recruitment of transaction advisors (June 2013) • Preparation of transaction documents (June-July 2013 • Marketing of Bond (road show) (22-25 July, 2013) • Launch of Transaction (25 July 2013) • Pricing (26 July 2013) • Launch of bond exchange offer (26 July 2013) • Issue & Closing (7 August 2013)

5. Transaction Team • Lead Managers (Citigroup, Barclays) • Co-Managers (EDC Stockbrokers, Strategic African Securities) • International legal counsel (Denton’s) • Local legal counsel (JLD & MB) • Government of Ghana Transaction Committee (MoF, Bank of Ghana)

6. Road Show • Ghana’s investor roadshow was designed to be broad-reaching • The Republic’s had been absent from the international bond markets for the last six years • There was a non-deal road-show in April 2013 (part of IMF/WB Spring meetings) and some periodic meetings with some investors • Two teams travelled to London, Frankfurt, Munich, Sam Francisco, Los Angeles, Boston and New York • Ghana met with 58 investors via one-on-one meetings, group events or conference calls • The Ghana team was represented by • Minister of Finance • Deputy Minister of Finance • Governor of Bank of Ghana • Deputy Governor of Bank of Ghana • Additional officials from both the Ministry of Finance Bank of Ghana

7. THE GHANA CREDIT STORY • Despite current fiscal challenges, investors saw fundamental long-term value in Ghana reflected in: • Governance • Political stability with strong institutions • Good governance - Ghana consistently ranks in the Top 10 for African Governance (Mo Ibrahim Index) • Good Business Environment • Strong Reform agenda – Public Financial Management, Financial Sector, Infrastructure • The Economy • One of the fastest growing economies in Africa • A diversified economy • Oil & Gas Prospects with sound revenue management under the Petroleum Revenue Management Act

8. Terms of the Transaction

9. Analysis of Recent African Sovereign Issues • Note differences among countries • Ratings • Timing or dates • Size of offers • Blend of offers (Nigeria) • Tenor of offers • Market conditions • Processes

10. Comparison of Costs • Nigeria • Higher credit rating • Shorter maturity (5-Year) • Rwanda • Good market timing (May 2013) • Before Bernanke’s announcement (Wednesday June 19) of likely tapering of quantitative easing resulting in interest rate hikes and high market volatility • Zambia • Good market timing (September 2012)

11. Secondary Market Quotes August 7, 2013 • Secondary market trading indicates that Ghana’s bond is well priced • Rwanda (B) is trading at a higher yield than Ghana (B/B+) (8.13% versus 8.06%) • Therefore Rwanda is NOT more creditworthy than Ghana • Zambia is trading at a higher yield compared to Ghana 2017 (because of maturity difference – Ghana 2017 has shorter maturity)

12. Investors who bought our bonds Summary of Order Book

13. Managing Our Debt More Efficiently • Ghana became the first Sub-Saharan African country (excluding South Africa) to use the Eurobond market to manage its overall debt by: • Reducing cost • Reducing the risk of rollover • Ghana 2017 is a bullet bond repayable in October 2017 • Risk of high interest rate or uncertain market access • Prudent to initiate an orderly retirement to reduce market risks of rollover

14. Reducing the Cost and Rollover Risk of the Ghana 2017 Bond • On 26 July 2013, one day after pricing of the new US$750m 7.875% notes due 2023 (the “New Notes”), Ghana launched an invitation to holders of Existing Ghana 2017 Notes to exchange their holdings for up to US$250m of new 7.875% notes due 2023 • US$356m of Existing Notes were validly tendered • This translated into and Exchange of $219 million face value of the Ghana 2017 • The difference in interest costs between the Ghana 2017 bond (8.50%) and the new Ghana 2023 Bond (7.875%) translates into an estimated annual savings of $1.375MM

15. Reducing the Cost of Domestic Debt • The proposed refinancing of maturing domestic debt with Eurobond proceeds is justified in the difference in cost between domestic debt (19 – 23%) and the Eurobond (7.875%). • Estimated annual interest savings after adjusting for exchange rate depreciation is GH¢21 – 48 million

16. Conclusion • Ghana achieved its financing objectives with the transaction • Extended Ghana’s maturity profile • Reduced the rollover risk of the Ghana 2017 bond • Raised cost effective funds to refinance high-cost domestic term debt • Set a new benchmark and achieved a lower coupon than Ghana’s debut 10-year USD bond • Listing of notes on the Ghana Stock Exchange, facilitating access for local investors. • First sub-Saharan African country (excluding South Africa) to listed its Eurobond on the local stock Exchange • Ghanaian institutional investors (banks, insurance companies, pension funds) participated in the offer.

17. Looking Ahead • Debt policy will be guided by the principle of financing capital expenditures with domestic and international long-term debt (the upcoming debut issue of a domestic seven-year bond reflects this policy) • Project specific bonds will be raised for self-financing projects while general conventional bonds will be raised for other capital expenditures • Ghana will continue to source concessional financing for social infrastructure.