IMF Warns Ghana Against Early Return to International Markets

The International Monetary Fund (IMF) has cautioned the Government of Ghana against making a premature return to international capital markets, warning that renewed “excessive and expensive borrowing” 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, has urged government to remain prudent in its financing decisions and to focus on concessional loans from development partners such as the World Bank, the African Development Bank (AfDB), and the IMF itself.

In an interview on Channel One TV’s Point of View with Bernard Avle, Dr. Alter noted that although global financial conditions have improved slightly, borrowing on international markets would still come at a significantly high cost — likely above 10 percent interest — due to Ghana’s current credit rating.

“We have advised the government to be extremely prudent, not to repeat the excessive borrowing mistakes of the past,” Dr. Alter said. “When concessional financing is available from multilateral agencies like the World Bank, the African Development Bank, and the IMF, there’s little reason to seek expensive loans on the international markets.”

Dr. Alter emphasized that borrowing costs remain prohibitive for emerging economies like Ghana, making any return to the Eurobond market risky under present conditions.

He further explained that under the ongoing IMF-supported programme, Ghana faces strict limits on new external borrowing to ensure 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 begin lengthening bond maturities beyond one year,” Dr. Alter said. “We hope that by early next year, conditions will be in place for the domestic bond market to reopen.”

Ghana has remained locked out of the international capital markets since its 2022 debt default, when the government suspended payments on most of its external debt as part of efforts to stabilize the economy. The default severely eroded investor confidence, effectively cutting off access to new borrowing.

The country is currently implementing a $3 billion IMF-supported programme aimed at restoring macroeconomic stability after years of widening fiscal deficits, rising debt levels, and high inflation. The programme seeks to return public debt to sustainable levels, rebuild foreign reserves, and promote inclusive growth.