The World Bank has cautioned Ghana against rushing back to the international Eurobond market, warning that premature re-entry could undermine hard-won fiscal stability and derail ongoing economic reforms.
In its newly released 2025 Policy Notes on Ghana, the Bank stressed that the country must resist the temptation of “quick money” from international bond investors until fiscal stability is firmly entrenched. Returning too soon, it warned, could expose Ghana to high interest rates, rising debt service burdens, and renewed investor skepticism.
Instead, the World Bank urged the government to stay focused on consolidating gains under the IMF-supported programme by tightening fiscal discipline through a balanced mix of revenue mobilization and prudent spending.
Moreover, the World Bank warned the Bank of Ghana against large foreign exchange market interventions, which risk depleting reserves and creating artificial currency stability.
The bank tells the government to rather concentrate on “Maintaining the momentum on fiscal consolidation.”
It adds that it can do so by “focusing on both spending and revenue measures to meet the fiscal targets agreed with the IMF, thereby placing the debt on a sustainable trajectory; avoiding large foreign exchange interventions by the Bank of Ghana; and postponing reentering the Eurobond market until fiscal stability is firmly established.”
The caution comes as memories remain fresh of Ghana’s earlier reliance on Eurobonds, which ballooned the country’s external debt and contributed to its 2022 debt crisis, leading to the government’s inability to pay and resulting in a default.
However, the good news is that, earlier this month, President John Dramani Mahama, in his maiden media encounter, indicated that his government is not in a rush to enter the international capital market. To him, if the economy has been able to run after the country’s default leading to the exit, there is no need for his government to scramble for international loans.
He is convinced that the economy can be managed with domestic revenues, coupled with prudent financial management. This position of President Mahama reinforces the World Bank’s call that rushed reentry might cause the economy.
The World Bank’s advice may sound technical to ordinary Ghanaians, but its implications are not abstract. As many other economists have warned, a hasty return to the Eurobond market could mean higher taxes, squeezed social spending, and continued struggles with inflation and debt.
By strengthening fiscal discipline, as proposed by the World Bank, and avoiding excessive currency interventions, Ghana can reestablish credibility and borrow on far more favorable terms when the time is right.
