The International Monetary Fund (IMF) has advised the Government against a premature return to the international capital markets, warning that a repeat of the “excessive and expensive borrowing” of the past could undermine the country’s fragile economic recovery.
With just two weeks to the presentation of the 2026 national budget, the IMF’s Resident Representative in Ghana, Dr. Adrian Alter, urged government to remain extremely prudent in its financing decisions and focus on concessional loans from multilateral partners such as the World Bank, the African Development Bank, and the IMF itself.
In an interview on Channel One TV’s Point of View with Bernard Avle, IMF Resident Representative to Ghana, Dr. Adrian Alter, noted that while global financial conditions have improved slightly, borrowing on international markets would still come at a painfully high cost – likely exceeding 10 percent interest given Ghana’s current credit rating.
“We have advised the government to be extremely prudent, not to go back to the same mistakes with excessive borrowing in the past. When you have available concessional financing from multilateral agencies like the World Bank, the African Development Bank, and the IMF itself, you shouldn’t go to international markets where interest rates are currently extremely pricey.”Dr. Alter said.
According to him, borrowing costs remain prohibitive for emerging economies like Ghana, making any return to the Eurobond market risky under present conditions.
He explained that under the IMF-supported program, Ghana has strict limits on new external borrowing to safeguard debt sustainability. The country is therefore expected to maintain a financing mix of about 70 percent domestic and 30 percent external borrowing, consistent with the IMF’s debt sustainability framework and agreements with creditors.
“On the domestic market, we’ve worked closely with the government to start lengthening the maturity of its bonds beyond one year. Dr. Alter said. “We hope that at the start of next year, conditions will be in place for the domestic bond market to reopen, ” he added.
Ghana remains locked out of the international capital markets following its debt default in 2022, when the government suspended payments on most of its external debt as part of efforts to stabilize the economy.
The country’s inability to meet its Eurobond obligations eroded investor confidence, effectively cutting off access to new borrowing from global markets.
However, Ghana is currently implementing a $3 billion IMF-supported program aimed at restoring macroeconomic stability after years of widening fiscal deficits, ballooning debt, and surging inflation forced the government into a debt restructuring exercise in 2023.
The program seeks to bring public debt to sustainable levels, rebuild foreign reserves, and promote inclusive growth.