Financial experts are raising caution over Ghana’s potential return to international capital markets, following recent remarks by former President John Dramani Mahama suggesting that the country is exploring options to re-engage foreign investors.
The High Street Journal (THSJ), speaking to , Dr. Eric Boachie Yiadom, a Financial Economist and Senior Lecturer at the University of Professional Studies, Accra (UPSA), warned that any move to re-enter the international debt market must be backed by improved creditworthiness and economic fundamentals, or it could worsen the country’s fiscal situation.
“Right now, Ghana’s credit rating is still very weak in the CCC range, which means any borrowing on the international market would come with very high interest rates, possibly 10% or more, that’s not sustainable,” Dr. Yiadom said.
He explained that borrowing at such high rates would significantly increase interest payments and further strain government finances, which are already under pressure due to heavy reliance on short-term domestic loans and growing debt service costs.
High Risks, Low Rewards If Done Prematurely
According to Dr. Yiadom, going to the international market in Ghana’s current condition would be “desperate” and counterproductive.
“It’s better for government to wait until our credit rating improves. If we can secure a rate around 5–6%, that would be manageable. But right now, borrowing externally would just add to the burden,” he said.
His comments echo the concerns raised by Africa Policy Lens (APL) in its latest report, which highlighted that Ghana’s debt has risen by over GH¢42 billion in just the first quarter of 2025, largely through short-term Treasury bills. APL warned that this strategy creates a “borrow-to-repay” cycle that is risky and unsustainable.
Focus on Strengthening the Domestic Market
Rather than rushing back to foreign lenders, Dr. Yiadom emphasized the need for the government to consolidate confidence in the domestic debt market, especially after the 2023 debt restructuring (DDE) disrupted investor trust.
“We’ve seen interest rates on T-bills dropping, and investor confidence is slowly returning. The focus now should be on building a stronger domestic base, issuing longer-term bonds, and creating a stable environment for local investors,” he said.
He added that the external debt market carries exchange rate risk and higher exposure to global economic shocks, while domestic markets offer more control and flexibility , especially if the government manages inflation and maintains fiscal discipline.
The Bottom Line: Patience Over Pressure
Dr. Yiadom said that while returning to international markets is a necessary step in the long term, doing so prematurely would be harmful unless Ghana improves its credit profile and stabilizes key economic indicators.
“We need to exercise patience. Let’s fix the fundamentals, build market confidence, and negotiate debt relief where needed. Then, when the time is right, we can go back to the international market, but on our own terms, not under pressure,” he stressed.
