The improvement in Ghana’s debt sustainability programme is expected to lead to improved ratings from the international credit rating agencies.
According to professional services firm, Deloitte, this will in turn drive up investor confidence in the economy.
In its assessment of the 2025 Budget, Deloitte, said the plans by the government to extend its bonds maturity profile and improve activity of the secondary bonds market will create some breathing space by way of increased access to longer dated debt and reduced cost of issuances.
This is also expected to provide relative predictability in government’s cash flow management and will help smoothen the redemption profile and mitigate refinancing /rollover risks associated with the debt portfolio.
Again, it said plans to leverage the sinking fund, to build cash buffers for debt repayment purposes, is expected to increase government’s debt repayment credibility and boost investor confidence.
“Whilst this can be regarded as a good strategy for prudent debt management, the commitment to build cash buffers will require high level of fiscal discipline,” it added.
Lastly, Deloitte said the recent drop-in treasury bills rate, which has resulted from government’s resolve to reject auction offers for T-bills above designated thresholds, connotes fiscal discipline and must be commended.
However, it wants the Finance Minister, Dr. Cassiel Ato Forson, to work closely and in a coordinated manner with the Central Bank in the bid to advance government’s fiscal objectives “as certain government decisions, regardless of how well intended they may be, can have adverse impact on our monetary policy objectives.”
It concluded that the overall improvement in the coordination between the monetary and fiscal policy authorities will greatly enhance our ability to achieve our economic goals.
