World Bank Cautions Ghana on Swift Return to Capital Markets

February 14, 2025

(3 Minutes Read)

Robert Taliercio, the World Bank Country Director for Ghana, Liberia, and Sierra Leone, has advised Ghana to avoid a hasty return to international capital markets, as it could jeopardize the nation’s recent economic recovery. During the launch of the World Bank’s latest Public Finance Review report, titled “Building the Foundations for a Resilient and Equitable Fiscal Policy,” he emphasised that such a premature move might send negative signals to investors, potentially reversing the progress achieved through Ghana’s debt restructuring and leading to unsustainable borrowing costs.

Taliercio’s comments come after Ghana successfully restructured its domestic and external debts, which facilitated significant relief under the USD 3 billion IMF Extended Credit Facility (ECF) program. While he acknowledged these accomplishments, he warned against becoming complacent, highlighting Ghana’s history of reverting to unsustainable financial practices. He cautioned that the current risk lies in the temptation to adopt a business-as-usual approach, which has historically led to problems. Ghana has requested a record 17 IMF programs and has been under active IMF oversight for 40 out of its 68 years of independence.

He further noted that rushing back into international markets for dollar funding could be detrimental, potentially leading to high borrowing costs and renewed financial instability. Since 2022, Ghana has been excluded from international capital markets due to elevated debt levels, sluggish economic growth, and a weak balance of payments. While the country aims to restore investor confidence, the World Bank emphasizes that careful timing and fiscal discipline will be essential for ensuring long-term economic stability.