Ghana had to pay 10.75 per cent to borrow over 15 years, the highest borrowing rate for any country in the last two decades. Issouf Sanogo/AFP Photo/Getty Images
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Shift in sentiment means governments must drop sales or pay more to borrow. Double-digit borrowing rates were once all but extinct in sales of government debt.From Pakistan to Egypt to El Salvador, issuers were guided through the morass of sovereign bond markets by international banks and investors encouraging them to sell larger amounts of bonds at lower rates, culminating in the near $23bn record issuance by so-called frontier countries last year.Issuance has fallen to $14bn and finance ministers are being asked to choose between dropping sales of new government debt or swallowing higher borrowing rates.Instead, with prices for exports including oil and gold low, growth slipping and the currency falling, Ghana had to pay 10.75 per cent to borrow over 15 years, saddling it with one of the highest borrowing rates of any country in the past two decades.A year ago, Ivory Coast was able to borrow for 10 years at a rate of 5.63 per cent while Vietnam secured a rate of just 4.8 per cent, illustrating the abrupt shift in sentiment to frontier debt.
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