As Ghana re-enters the domestic bond market after years of a break, banking and corporate governance expert Dr. Richmond Atuahene is urging caution, warning that without strict safeguards, the move could drag the country back into a debt overhang.
In a detailed policy review copied to The High Street Journal, he outlines nine practical strategies the government must adopt to avoid repeating past mistakes and ensure long-term debt sustainability.
1. Keep Debt Within Safe Limits
He highly recommends that the government must strictly stick to the IMF targets of keeping debt below 55% of GDP by 2028, and avoid piling on new debt that could worsen sustainability risks.
2. Boost Domestic Revenue Aggressively
The banking consultant maintains that the solution starts at home. Ghana must collect more taxes efficiently, especially from property owners, large companies, high-income earners, and the informal sector.
He adds that digital tools like property tax platforms can significantly increase revenue and reduce reliance on borrowing.
3. Enforce Fiscal Discipline and Cut Waste
Spending must be tightly controlled. Dr. Atuahene calls for strict limits on government expenditure, ending off-budget spending, and ensuring every cedi spent delivers value.
This includes reforming state-owned enterprises and avoiding unnecessary bailouts.
4. Rebuild Investor Confidence
After the debt restructuring, trust is fragile. He recommends that the government honour commitments timeously and strengthen governance.
Dr. Atuahene further indicates that the authorities should deploy tools like the Sinking Fund to assure investors, since confidence is key to borrowing at lower cost.
5. Anchor Fiscal Policy with Clear Rules
Ghana needs strong fiscal rules such as debt caps and primary surplus targets to prevent reckless borrowing, especially during election cycles.
6. Reform the Mining Sector for More Revenue
Despite Ghana’s rich mineral resources, he argues that revenue remains low. He therefore recommends that the government review tax exemptions and incentives, renegotiate mining agreements, and increase state participation.
This, he believes, could unlock significant revenue without borrowing.
7. Communicate Transparently with Investors
Clear and honest communication, he says, is critical. He insists that the government must share timely data on debt and finances, engage banks, pension funds, and investors openly.
For him, transparency builds trust and prevents market panic.
8. Strengthen the Domestic Capital Market
To reduce reliance on foreign investors, Ghana, he proposes, should grow the local investor base, encourage retail participation, and improve market liquidity.
This creates a more stable and resilient borrowing environment.
9. Fight Corruption Ruthlessly
Dr. Atuahene stresses that corruption remains a major drain on public finances. He calls for stronger anti-corruption laws and the strengthening of independent institutions like the Office of the Special Prosecutor.
He further calls for harsh penalties for offenders, as reducing corruption will improve revenue and reduce unnecessary borrowing.
The Bottomline
Dr. Atuahene argues that Ghana’s return to the bond market is not the problem itself; however, how it manages that return will determine whether the country escapes or re-enters a debt trap.
Without discipline, transparency, and reform, today’s recovery could quickly become tomorrow’s crisis.
