Early return to International capital market could weaken economic recovery

By: Racheal Asamoah

World Bank Country Director for Ghana, Liberia, and Sierra Leone, Robert Taliercio, has warned Ghana against making an early return to international capital markets, cautioning that such a move could undermine the country’s recent economic recovery.

He explained that an early return could send negative signals to investors, leading to a reversal of gains made under Ghana’s debt restructuring efforts and exposing the nation to unsustainable borrowing costs.

He was speaking at the launch of the World Bank’s latest Public Finance Review report, titled “Building the Foundations for a Resilient and Equitable Fiscal Policy.’’

His warning follows Ghana’s successful restructuring of both domestic and external debts, which secured significant relief under the $3 billion IMF Extended Credit Facility (ECF) programme.

While commending these achievements, Mr. Taliercio cautioned against complacency, noting that Ghana has had a history of falling back into unsustainable financial practices.

“The risk now is falling into complacency with these achievements and returning to a business-as-usual mindset – a recurring error in the past. Ghana has requested a record 17 IMF programs and has been under active IMF supervision for 40 out of its 68 years of independence,” he stated.

He further stressed that rushing back to international markets for dollar funding could be counterproductive, potentially triggering a return to high borrowing costs and renewed financial instability.

Since 2022, Ghana has been locked out of international capital markets due to soaring debt levels, sluggish economic growth, and a weak balance of payments.

More Stories Here

Related

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}