Don’t rush back to Eurobond market - World Bank Tells Ghana

The World Bank has urged Ghana to resist the temptation of a quick return to the Eurobond market, cautioning that such a move would be interpreted by international investors as the “easy way out” of the country’s fiscal challenges.

In its latest assessment, the Bank stressed that Ghana’s credibility cannot be rebuilt through new borrowing but only through fiscal discipline, transparency, and difficult political reforms. It advised the Mahama administration to focus on strengthening fiscal and growth fundamentals rather than seeking fresh debt from international markets.

“Importantly, the new administration should also refrain from a hasty return to the Eurobond market, which international investors would interpret as taking the easy way out,” the report noted. “Instead, the government should focus on strengthening the country’s fiscal and growth fundamentals and on convincing the private sector that public debt is on a sustainable path.”

The World Bank underscored the importance of sticking to the Medium-Term Debt Management Strategy and ensuring full transparency of the Annual Borrowing Plan. It urged government to use the post-election honeymoon period to implement tough but necessary reforms, thereby re-establishing trust with both citizens and investors.

This caution comes against the backdrop of Ghana’s long history of economic crises. Since independence, the country has entered 17 International Monetary Fund (IMF) programmes, spending almost 40 out of its 68 years under active Fund support. The Bank observed that easy access to Eurobond markets over the past decade encouraged fiscal indiscipline, excessive borrowing, and delayed reforms, which left the economy exposed to shocks.

“The 2022 crisis was not caused by COVID-19 or the Russia-Ukraine war,” the report argued, “but by years of fiscal indiscipline, excessive borrowing, and weak public financial management.”

While Ghana has recently completed debt restructuring and secured IMF support, the World Bank warns the country is “not yet out of danger.” It called for a decisive reset involving enforcement of fiscal rules, expansion of the tax base, and reforms in state-owned enterprises, particularly in the energy and cocoa sectors.

President John Dramani Mahama has already echoed this cautious approach. At a recent media engagement, he said: “We have survived without going to the capital markets. We’ve survived without borrowing… As the President, I would not favour a quick return to the international capital market. I think we should go like this for a while and consolidate the economy before we look at external financing.”

The Bank concluded that without a clean break from past habits, Ghana risks once again being shut out of markets and trapped in the familiar cycle of crisis and bailout.