IMF Warns Ghana Against Return to Costly Borrowing Practices
The International Monetary Fund (IMF) has cautioned government against returning to high-cost borrowing as it works to restore macroeconomic stability under the ongoing Fund-supported programme.
Speaking on Channel One TV’s The Point of View on Monday, November 3, the IMF Resident Representative to Ghana, Dr Adrian Alter, stated that the Fund has advised government to exercise restraint in its borrowing activities to avoid repeating past mistakes of excessive and expensive debt accumulation.
“On the borrowing side, we have advised the government to be extremely prudent—not to go back to the same mistakes of excessive and expensive borrowing in the past,” Dr Alter said.
He noted that Ghana should rely more on concessional financing from multilateral institutions such as the World Bank, the African Development Bank (AfDB), and the IMF, rather than returning to the international capital markets where borrowing costs remain elevated.
“When you have available concessional financing from multilateral agencies like the World Bank, the African Development Bank, and the IMF loan on concessional terms, you shouldn’t go to the international market where the interest rates are currently extremely pricy,” he added.
According to Dr Alter, although global financial conditions have eased marginally, interest rates remain high, with Ghana’s current credit rating implying that any international borrowing could attract rates around 10 percent or higher.
He explained that the IMF programme includes specific limits on external borrowing to ensure debt sustainability and compliance with creditor agreements, adding that the current financing mix of the government comprises about 70 percent domestic and 30 percent external borrowing.
Dr Alter also disclosed that the Fund is supporting efforts to extend the maturity period of domestic debt instruments, which currently average around one year, as part of measures to strengthen the local debt market.
He expressed optimism that by early 2026, Ghana’s domestic bond market could reopen, providing a more stable and diversified financing environment.
Ghana is currently under a three-year Extended Credit Facility (ECF) arrangement with the IMF aimed at restoring macroeconomic stability, ensuring debt sustainability, and supporting inclusive growth.
