ISSER Director Cautions Government Against Rushing Back to Capital Market
The Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey, has advised the government to exercise caution in returning to the international capital market following Ghana’s recent debt restructuring.
Speaking at his inaugural lecture at the Ghana Academy of Arts and Sciences on the theme “Debt, Investment, and Growth in Ghana: Did We Borrow to Consume?”, Professor Quartey emphasized the need for a more prudent borrowing strategy, particularly regarding Eurobonds.
He warned that heavy reliance on external debt is unsustainable for long-term economic stability.
Ghana’s fiscal deficit stood at 3.2% of GDP in 2023, with projections indicating a rise to 5.2% of GDP in 2024. Against this backdrop, Professor Quartey underscored the importance of effective debt management and sustainable financing to minimize financial risks.
Call for Alternative Funding Sources
As part of the IMF-supported program, Ghana recently underwent a debt restructuring process aimed at restoring macroeconomic stability. However, concerns remain over the country’s long-term debt sustainability.
Professor Quartey urged the government to explore domestic and multilateral financing options instead of increasing its dependence on external borrowing.
“I want to sound this caution. Borrow less from the capital market and at reasonable interest rates. These days, you hear we want to go to the capital market. After the restructuring, you hear we are hoping very soon we will finish the restructuring and be able to go to the capital market. Why the rush?” he questioned.
He further noted that borrowing from the capital market, particularly through Eurobonds, has proven to be expensive and unsustainable.
“We ought to shy away from them. Let us get more multilateral and domestic sources of funding. They are cheaper,” he stressed.
Professor Quartey’s remarks come at a time when Ghana is seeking to rebuild investor confidence while maintaining fiscal discipline in line with IMF recommendations.
