The Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey, has cautioned the government against rushing back to the international capital market following Ghana’s recent debt restructuring.
He emphasized that a more prudent approach to borrowing—particularly regarding Eurobonds—is necessary, as heavy reliance on external debt is unsustainable for long-term economic growth.
Speaking at his inaugural lecture at the Ghana Academy of Arts and Sciences on the topic “Debt, Investment, and Growth in Ghana: Did We Borrow to Consume?”, Professor Quartey outlined Ghana’s fiscal position, noting that the country’s deficit financing stood at 3.2% of GDP in 2023, with the 2024 figure projected to rise to 5.2% of GDP.
He stressed the importance of effective debt management and sustainable financing strategies to support economic growth while minimizing financial risks.
As part of the IMF-supported program, Ghana recently undertook a debt restructuring exercise to ease its financial burden and restore macroeconomic stability. However, concerns persist over the country’s long-term debt sustainability. Professor Quartey urged the government to explore domestic financing options rather than increasing external vulnerabilities.
“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 to go to the capital market? That is where we went to and we are having these problems, and you still want to quickly finish giving people a haircut and go to the capital market. I think we should tread cautiously when it comes to borrowing, especially Eurobonds and those capital market funds.
“They are too expensive and unsustainable. We ought to shy away from them. Let us get more multilateral and domestic sources of funding. They are cheaper,” Professor Peter Quartey stated.
