World Bank Warns Ghana: “Don’t Rush Back to Eurobond Market”

The World Bank has cautioned Ghana against making a hasty return to the Eurobond market, warning that such a move would signal to international investors that the country is taking the “easy way out.”

According to the Bank, Ghana’s credibility cannot be restored through fresh borrowing but only through strict fiscal discipline, transparency, and politically difficult reforms.

“The new administration should refrain from a hasty return to the Eurobond market, which international investors would interpret as taking the easy way out,” the report stated. “Instead, the government must strengthen fiscal and growth fundamentals and convince the private sector that public debt is on a sustainable path.”

The Bank emphasized that Ghana’s recovery hinges on strict adherence to the Medium-Term Debt Management Strategy and full transparency of the Annual Borrowing Plan. It advised the government to seize the post-election period to roll out tough reforms and rebuild trust with citizens and investors.

Ghana’s economic challenges, the report noted, are not new. Over the past 68 years, the country has entered 17 IMF programmes, spending nearly 40 of those years under active Fund support. The World Bank stressed that the 2022 economic crisis was not caused by COVID-19 or the Russia-Ukraine war, but by years of fiscal indiscipline, excessive borrowing, and weak financial management. Easy access to Eurobonds in the past decade, it said, delayed critical reforms and left the economy vulnerable.

Even after recent debt restructuring and IMF support, the Bank cautioned that Ghana is still not out of danger. “Reestablishing credibility will take time, but the process can start immediately,” it said, urging decisive action to break the country’s recurring cycle of boom and bust.

President John Mahama has already aligned with this stance, saying he does not support a quick return to international capital markets. “We have survived without borrowing from the capital markets. As President, I would not favour a quick return. We must consolidate the economy before seeking external financing,” he said.

The World Bank recommended bold reforms, including enforcing fiscal rules, broadening the tax base, and overhauling state-owned enterprises, especially in the energy and cocoa sectors. Without these steps, it warned, Ghana risks once again being locked out of global markets and trapped in its historical cycle of crisis and bailouts.