Investors push for Ghana’s return to global capital markets; government says no rush

Offshore investors and fund managers are urging Ghana to resume participation in global capital markets, citing improvements in the country's economic stability, credit rating upgrades, and strengthened international reserves. These calls came during engagements at the IMF/World Bank meetings in Bangkok, Thailand, and at private meetings organized by international banks. Investors expressed interest in Ghana raising funds through bonds and syndicated loans.

Some investors are attracted to Ghana's improving economic conditions and the Bank of Ghana's reserve accumulation, viewing the country as an increasingly attractive investment destination. Others are drawn by Ghana's membership in the IMF's Policy Coordination Instrument (PCI) program, which they believe could help maintain fiscal discipline and protect recent economic gains.

According to one fund manager, Ghana's participation in the PCI program suggests that the country is unlikely to deviate from its current economic trajectory in the near future.

Investors are also seeking to diversify their portfolios and achieve higher returns than those available in the US market. A Ghanaian Eurobond offering an average yield of around 8% could provide such returns, although this would represent a higher borrowing cost for Ghana. Despite lingering concerns following Ghana's debt default, some investors believe that the safeguards associated with the proposed PCI program could help reduce the risk of another default.

Bank of Ghana Governor Dr Johnson Asiama addressed the investors' demands at one of the meetings, stating that the central bank would continue implementing monetary policies to maintain currency stability and keep inflation low. The government, represented by Technical Advisor to the Finance Minister Dr Theo Achampong, emphasized that there was no rush to return to international borrowing and that the focus was on stabilizing the economy and building strong international reserves.

The government's objective is to improve Ghana's credit ratings, aiming for investment-grade status, and not to rely on international capital markets for financing needs in the near term.

Finance Minister Dr Cassiel Ato Forson reiterated the government's stance against borrowing from international capital markets as part of its financing plans for 2026. He stated that any decision to return would be communicated to the people of Ghana, adding that the 2026 budget made no provision for international financing. The IMF has urged Ghana to prioritize rebuilding investor confidence and improving its credit rating before returning to international capital markets, emphasizing the need to consolidate the gains from debt restructuring and strengthen domestic financing capacity.

The IMF Resident Representative in Ghana, Dr Adrian Alter, highlighted that Ghana's debt position had improved significantly under the IMF-supported program, with central government debt declining to about 45% of GDP, a level previously expected only by 2034. Professor Peter Quartey, the Director of the Institute of Statistical, Social and Economic Research (ISSER), cautioned against a hasty return to international capital markets, warning that excessive reliance on external debt could undermine long-term economic stability.