The World Bank has advised Ghana’s new administration to prioritise restoring economic credibility and fiscal discipline before seeking re-entry into the international capital markets.
In its latest assessment, the Bank cautioned against any hasty return to the Eurobond market, warning that international investors could perceive such a move as “taking the easy way out.” Instead, it stressed that credibility must be rebuilt through transparency, fiscal discipline, and politically difficult reforms.
“Credibility cannot be rebuilt through fresh borrowing but only through discipline, transparency, and politically difficult reforms,” the report stated. It urged government to strictly implement the Medium-Term Debt Management Strategy and fully disclose the Annual Borrowing Plan to strengthen market confidence.
The report further highlighted Ghana’s long history of fiscal instability, noting that the country has been under International Monetary Fund (IMF) programmes for 40 out of its 68 years of independence. It argued that the 2022 financial crisis was largely self-inflicted, caused by years of fiscal indiscipline, excessive borrowing, and weak public financial management—not solely external shocks like COVID-19 or the Russia-Ukraine war.
According to the World Bank, easy access to Eurobond financing in the past decade encouraged political short-termism and delayed critical structural reforms. Even with debt restructuring and ongoing IMF support, the Bank cautioned that restoring credibility will take time but can begin immediately if the government uses its early mandate to push through difficult but necessary changes.
President John Mahama has already signalled alignment with this position, stating at a recent media engagement:
“We have survived without going to the capital markets. We’ve survived without borrowing. … As President, I would not favour a quick return to the international capital market. I think we should go like this for a while and consolidate the economy before we look at external financing.”
The World Bank’s recommendations include enforcing fiscal rules, broadening the tax base, and reforming state-owned enterprises, particularly in the energy and cocoa sectors, to break Ghana’s recurring cycle of debt and bailouts.
Source – My News Ghana
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