Government is to provide a 100 percent guarantee for a 1.14 billion cedis bond that will be issued under the Ghana Amalgamated Trust (GAT) to help the National Investment Bank (NIB).
The bond, which will be issued before the end of February this year will be the second tranche after an initial one for four other banks under the GAT.
The Chief Executive Officer of the GAT, Eric Otoo told Citi Business the money will be injected into the NIB as equity, giving the board and management of GAT an opportunity to have some control in the affairs of NIB.
“We have designed the legal and operational system to make NIB profitable in five years before we exit,” he stressed.
Mr. Otoo explained that the bond has a five year term maturity with a 21 percent interests rate guarantee.
He added that investors are demanding 100 percent government guarantee to give them comfort and assurance in case the bank is unable to pay back.
‘But I can tell you we won’t get there, the system we are going to use will rather make NIB financially strong and it will be in a position to pay back the bond’, he added.