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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 lack of investor confidence in the country’s 2025 budget statement.
“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 explained that, prior to IMF’s assessment and following the Finance Minister’s claim about the government missing its fiscal targets, now would not be a good time to return to the bond market as investors would be demanding a high risk premium for holding Ghanaian debt.
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 was worrying, 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,” 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
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