Director of the Institute of Statistical, Social and Economic Research (ISSER), Prof Peter Quartey
Professor Peter Quartey, the Director of the Institute of Statistical, Social and Economic Research (ISSER), on Wednesday cautioned against the government’s immediate return to the capital market, citing high interest rates.
The Development Economist made this statement in response to President John Mahama’s announcement of Ghana’s plan to borrow from both domestic and international markets.
The country’s status was not ideal for such loans, Prof. Quartey said in an interview with the Ghana News Agency on the sidelines of an Economic Dialogue organized in Accra by the Graphic Communications Group Ltd. and Ecobank.
“We are not at the B level yet. It means we are still classified as a risky country, and for risky countries, when you go to borrow, your interest rate is a bit higher than if you were classified as a non-risk country,” he said.
Ghana was locked out of the international capital market in 2022, with rating agencies downgrading the country’s overall creditworthiness and ability to meet its long-term debt obligations.
Following recent economic gains, Standard and Poor (S&P) Global Ratings upgraded Ghana’s credit rating to CCC+ from Selective Default, a move that has contributed to the government’s push to return to the capital market.
“Let’s make sure we get to a certain level where the international and investor community will see us as favorable. Then, when we go to borrow, we will borrow at reasonable interest rates,” Prof. Quartey advised.
He stated that while the government’s “Big Push” agenda and other developmental projects required funding, “there is no need to rush to borrow at very punitive interest rates.”
Mr. Seth Terkper, Presidential Advisor on the Economy, said the government’s plan to return to the capital market would be approached with caution, adding that such a platform would enable the government to borrow for longer periods.
“As the President has said, when we start borrowing, we should channel it toward projects that can pay for the loan or put some money aside, so that if it’s social infrastructure, we can develop it,” he said.
“We’ve started putting money into the Sinking and Stabilisation Funds, and we’re using this to pay down the debt, which is part of the reason for the government’s return to the capital market,” Mr. Terkper added.
Mr. Osei Gyasi, a Director at the Bank of Ghana, said recent economic developments had led to renewed investor confidence, culminating in an upgrade of Ghana’s credit rating by S&P from ‘Selective Default’ to ‘CCC+’.
He noted that fiscal pressures, currency volatility, and the global economic environment still posed significant risks, and called for consistent policy execution, deep structural reforms, and collective national resolve to sustain the gains.