Omanghana
Economist William Baah-Boateng has cautioned that Ghana should exercise restraint before attempting a full return to international capital markets, despite recent improvements in the country’s macroeconomic indicators and credit ratings.
The warning comes as policymakers explore options for financing economic recovery following Ghana’s recent debt restructuring. Financial experts, including Godfred Alufar Bokpin Agbloyor, argue that although the economy is showing signs of stabilization, the risks associated with premature borrowing from global markets remain significant.
Analysts say the primary concern is ensuring long-term debt sustainability. The International Monetary Fund has advised the Ghanaian government to avoid an early or expensive return to international capital markets until public debt levels are firmly placed on a sustainable path.
Under the current economic recovery framework supported by the IMF, Ghana is expected to maintain a cautious borrowing strategy that prioritizes domestic financing. The agreed structure allocates approximately 70 percent of borrowing from domestic sources and 30 percent from external sources, ensuring that new debt remains within manageable limits.
As part of the country’s debt restructuring agreements with international creditors, Ghana also operates under strict borrowing ceilings. For 2025, the external borrowing cap was set at approximately $250 million, reflecting the cautious approach recommended by international financial institutions.
Despite these restrictions, global credit rating agencies have recently upgraded Ghana’s sovereign ratings from levels associated with default. These upgrades followed progress in restructuring external debt and implementing economic reforms.
S&P Global Ratings raised Ghana’s rating to B- with a stable outlook, an improvement from its previous rating of CCC+ during the height of the debt crisis. Moody’s Investors Service also upgraded the country’s rating to Caa1 from Caa2, signaling a modest improvement in credit outlook.
Although the upgrades indicate progress, analysts emphasize that Ghana’s credit profile still faces several constraints. One major challenge is rebuilding investor confidence after the country’s 2022 sovereign debt default, which effectively cut Ghana off from international bond markets. Restoring credibility with global investors is expected to take time and consistent economic management.
Experts also point to structural weaknesses within the economy, including institutional limitations and high debt servicing costs, as factors that continue to influence credit assessments by international agencies.
In addition, Ghana’s economy remains vulnerable to external shocks. Fluctuations in global commodity prices, particularly gold, can significantly affect export revenues and fiscal stability. Because of these vulnerabilities, economists say a gradual and carefully managed return to international borrowing will be essential to avoid repeating past debt challenges.
For now, analysts believe Ghana’s focus should remain on strengthening fiscal discipline, improving institutional frameworks, and sustaining economic reforms before re-entering global capital markets at scale.
Source: Omanghana
