The World Bank’s Country Director for Ghana, Robert Taliercio, says a quick return by the country to the international capital market would be premature and undermine the recent economic recovery made by the state.
He says such a move will send negative signals to investors which would reverse the few gains made under the debt restructuring programmes undertaken by the government.
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,” he indicated that a quick return to the international market will expose Ghana to unsustainable borrowing costs.
Taliercio’s warning follows the country’s successful restructuring of both domestic and external debts to secure a US$3 billion Extended Credit Facility from the International Monetary Fund (IMF).
He cautioned against complacency, whilst acknowledging the achievements, 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 programmes and has been under active IMF supervision for 40 out of its 68 years of independence,” he noted.
He warned further that a quick return to the international markets for dollar funding could be counterproductive and possibly lead to high returns on borrowing and renewed financial instability.
Ghana has, since 2022, been out of the international capital markets as a result of increasing debt levels which dwindled economic growth and a weakened balance of payments.
Although Ghana is eager to regain investor confidence, the World Bank has warned that timing and fiscal discipline should be prioritised to ensure a long-term economic stability.
