World Bank Country Director Cautions Ghana Against Premature Return to International Capital Markets
World Bank Country Director for Ghana, Liberia and Sierra Leone, Robert Talierco, has cautioned Ghana against a “premature” return to international capital markets, asserting that could send the wrong signal to the markets and cause a reversal to unsustainable borrowing costs.
He made the assertion during the launch of the World Bank’s latest Public Finance Review report titled “Building the Foundations for a Resilient and Equitable Fiscal Policy” on Wednesday, February 12, 2025.
The caution by the World Bank Director follows the country’s successful restructuring of its domestic and external debts resulting in significant debt reliefs for the country under the $3 billion IMF ECF programme.
The significant debt reliefs coupled with stringent fiscal consolidation efforts underpinned by expenditure rationalisation and increased revenue mobilisation has further led to a restoration of investor confidence in the economy.
Since 2022, Ghana has been unable to access the international capital markets for dollar funding due to high debt levels, slow economic growth, and a low balance of payment account.
Speaking further at the launch of the World Bank report, Mr Talierco quipped, “Ghana needs to persist in its ambitious fiscal consolidation efforts, ensuring that adjustments are both fair and sustainable.”
“It is crucial to protect pro-poor and pro-growth investment, while enhancing domestic revenue mobilisation. Additionally, Ghana must address the increasing fiscal liabilities stemming from energy and cocoa sector,” he added.
Per the World Bank report, Ghana’s recent debt crisis was fueled by weak expenditure controls, inefficient public spending, underperforming revenue collection, and costly borrowing.
“Despite taking decisive steps to stabilise the economy since 2022, Ghana needs to accompany fiscal consolidation with structural reforms to address the root cause of the crisis and support economic transformation and sustainable development,” said the report.
Ghana’s fiscal deficit averaged around 4% of GDP from 2008 to 2019, double that of 2000 to 2007.
During the same period, total expenditures averaged 19% of GDP – 6% higher than in 2000 to 2007.
