The International Monetary Fund (IMF) has advised Ghana to focus on rebuilding investor confidence and improving its credit rating before seeking to borrow again from the international capital markets.
The IMF Resident Representative in Ghana, Dr Adrian Alter, said the country should consolidate the gains achieved through its debt restructuring and strengthen domestic financing rather than rush into new external commercial borrowing.
Ghana’s debt situation has improved significantly under the IMF-supported programme, with the latest Debt Sustainability Analysis moving the country from a high risk of debt distress to a moderate risk.
Dr Alter noted that central government debt had declined to about 45% of Gross Domestic Product (GDP), a level the IMF had previously projected Ghana would reach only by 2034.
According to him, the improvement creates an opportunity for Ghana to gradually regain access to international capital markets, but restoring the country’s creditworthiness remains crucial to securing affordable financing.
“Ghana needs first to re-establish itself, and it needs to improve its rating,” Dr Alter said in an interview with Accra-based Channel One TV.
He explained that the government’s medium-term ambition of achieving investment-grade status could significantly reduce the cost of borrowing both domestically and internationally.
Dr Alter also described the reopening of Ghana’s domestic bond market in March as an important step towards rebuilding investor confidence. The government subsequently issued a seven-year local-currency bond.
He, however, acknowledged that Ghana continues to face substantial financing needs, including debt refinancing and funding for development projects, which require careful management of new borrowing.
The IMF representative stressed that reducing interest payments should remain a major priority, noting that debt servicing currently accounts for about one-third of government expenditure.
He said lowering borrowing costs would create greater fiscal space for the government to fund salaries, social programmes and capital projects.
Dr Alter further highlighted the importance of strengthening domestic revenue mobilisation to generate additional resources for development.
He said the IMF’s broader goal is to help Ghana address its economic imbalances and restore its ability to sustainably finance its needs through both domestic and international sources.
By: Prince Martey-Sogar