Senior Lecturer at the Ghana Institute of Management and Public Administration (GIMPA), Dr Nyame Baafi, has opposed the government’s plan to re-enter the bond market, citing concerns over fiscal mismanagement and investor confidence.
His remarks follow Finance Minister Dr Cassiel Ato Forson’s announcement in the 2025 Budget Statement that the government intends to reopen the domestic bond market to extend the maturity profile of its debt.
However, in an interview on Joy FM’s Top Story on Thursday, March 12, Dr Baafi said this move would not be in Ghana’s best interest, given the country’s current economic conditions.
“I don’t support any idea of going back to the bond market, especially when the Finance Minister has already admitted that the government has missed all its fiscal targets under the IMF programme,” he stated.
He argued that Ghana’s current economic situation makes borrowing from the bond market an unattractive option, as investors will likely demand a higher risk premium due to the government’s struggles to meet fiscal targets.
“The market is already reacting unfavourably to Ghanaian bonds. Issuing new ones now will only increase borrowing costs and worsen our debt burden,” he warned.
Dr Baafi also criticised inconsistencies in the budget statement, suggesting that it fails to align with data from the Ghana Statistical Service. He noted that such discrepancies undermine investor confidence, as the national budget is a critical source of information for potential investors looking at Ghana’s economic outlook.
“I initially thought the budget would outline how the government intends to expand the tax base. The Finance Minister mentioned a target tax-to-GDP ratio of 17.2%, but upon deeper analysis, the actual projection stands at 16.1%, which is only a marginal increase from the 15.9% inherited from the previous government. This raises concerns about revenue mobilization strategies,” he explained.
Also, the Minority in Parliament has raised concerns about the government’s decision to reopen the bond market, describing it as ill-advised and risky for Ghana’s economy.
Addressing the press on Thursday, former Minister of Finance Dr Mohammed Amin Adam warned that the government’s move to return to the domestic bond market is poorly timed and could have severe consequences for the country’s fiscal stability.
Read also: Ato Forson attributes debt-to-GDP decline to NPP’s 37% Eurobond haircut
DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
