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0 The Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey, has warned the government against making a hasty return to the international capital market following Ghana’s recent debt restructuring.
He advised that a more measured approach to borrowing, particularly concerning Eurobonds, is essential, as excessive reliance on external debt could prove unsustainable for the nation’s long-term economic stability.
Delivering 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 provided an overview of the country’s fiscal standing.
He noted that Ghana’s deficit financing stood at 3.2% of GDP in 2023 and is projected to rise to 5.2% in 2024. He emphasised the need for sound debt management and sustainable financial policies to support economic growth while minimising fiscal risks.
Ghana recently embarked on a debt restructuring exercise under an IMF-supported programme, aiming to alleviate financial pressure and restore macroeconomic stability.
However, concerns persist regarding the country’s long-term debt sustainability. Professor Quartey urged the government to prioritise domestic financing sources rather than increasing exposure to 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,” he remarked.
Professor Quartey stressed that capital market borrowings, particularly Eurobonds, are costly and unsustainable.
He called for a shift towards multilateral and domestic funding sources, which he argued offer cheaper alternatives.
“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,” he concluded.
