The World Bank has issued a strong warning to the Government of Ghana against making an early return to the Eurobond market.
According to the Bretton Woods institution, such a move could undermine the country’s credibility and derail efforts to restore long-term economic stability.
“The most positive immediate action the government can take would be to refrain from precipitously re-accessing the Eurobond market,” the World Bank cautioned in its latest assessment of Ghana’s post-crisis recovery.
The report added that the ability to borrow again on international markets should not be mistaken for a sign of credibility but rather as an opportunity to demonstrate lasting reform commitments.
The World Bank entreated Ghanaian authorities to use the current economic crisis as a turning point to implement long-delayed structural reforms, particularly in the energy and cocoa sectors, which it described as critical tests of the new administration’s policy resolve.
It advised that vigorous domestic revenue mobilisation must be prioritised to generate sufficient primary fiscal surpluses.
The World Bank specifically pointed to a key step to putting public debt on a sustainable path while creating fiscal space for development without relying heavily on external borrowing.
“There is an urgent need to signal a clear break from the past and a commitment to change. Staying the course is vital for establishing credibility and substantially reducing country risk and borrowing costs, improving investment sentiment among foreign and domestic firms, and supporting a sustained growth recovery and long-lasting job creation”, the report said.
