The Problems with Ultra Long - Term Government Debt (A Case of Ghana Government)
Prof. Emmanuel Opoku Ware
Citation :Prof. Emmanuel Opoku Ware, The Problems with Ultra Long - Term Government Debt (A Case of Ghana Government) International Journal of Managerial Studies and Research 2017,5(3) : 1-3
The Ghanaian government set a new benchmark for government bond duration. But these long term bonds which have a maturity of 70 years are nearly impossible to price. Moreover, they carry significant interest rate risk and credit risk. Long term financing to infrastructure and mobilization of private long term capital has been recognized as a key agenda in advancing the global economic development. There are several barriers in infrastructure financing and big gaps between expectation and reality. A highly pronounced barrier is the lacking of capacity of investors to price risks in a structured manner. This paper has discussed component-based infrastructure valuation analysis and modeling blocks. The component-based valuation mechanism is very useful for issuers and investors to categorize, analyze and price specific risks transparently and can provide a basis for structuring the risks on an ex-ante basis so as to make project investments suitable for investors of different risk preference