Finance and tax analyst Nelson Cudjoe Kuagbedzi has urged the government to guard against excessive borrowing, cautioning that Ghana’s successful completion of its debt restructuring programme could be undermined if prudent fiscal management is not maintained.
Mr. Kuagbedzi said the conclusion of the external debt restructuring marks a major turning point for the economy, but warned that the real test lies in preventing a return to the fiscal practices that contributed to the country’s 2022 debt crisis.
Speaking to Citi Business News, he said the completion of the debt exchange should be seen as a fresh opportunity to rebuild Ghana’s financial credibility rather than a reason to resume unsustainable borrowing.
“Going forward, prudent debt management coupled with sustained macroeconomic gains must be our watchword. We must not go back to the days of unsustainable debts and domestic debt exchange programme,” he cautioned.
His comments follow the government’s announcement that it had completed the exchange of the outstanding SADEREA Notes, marking the final stage of Ghana’s sovereign bond restructuring process.
The restructuring exercise began after Ghana’s economic crisis in 2022, which resulted in the country seeking debt relief from creditors following mounting fiscal pressures.
Mr. Kuagbedzi described the completion of the process as a significant milestone, particularly for Ghana’s capital market, which experienced major disruptions during the debt restructuring period.
He commended Finance Minister Dr. Cassiel Ato Forson and Bank of Ghana Governor Dr. Johnson Asiama for their roles in bringing the process to a close.
“This is the end of a very painful journey that has touched the soul and heart of many Ghanaians, most especially those of us who play within Ghana’s capital market,” he said.
The analyst expressed optimism that the successful completion of the restructuring would improve investor confidence and strengthen Ghana’s position in international financial markets.
He noted that Ghana’s current credit rating outlook could benefit from the development, as improved debt management would enhance the country’s creditworthiness.
“Currently, we are rated B- with positive outlook. And so we expect this exchange to once again enhance our creditworthiness and by extension enhance our credit ratings,” he said.
Mr. Kuagbedzi added that government’s commitment to honouring debt obligations had already contributed to rebuilding confidence among investors and market participants.
He, however, stressed that maintaining strong governance systems, ethical leadership and effective fiscal controls would be essential to preventing a recurrence of the debt challenges.
According to him, improvements in oversight and decision-making processes provide some assurance that Ghana would not return to the era of excessive borrowing.
“I can tell you for a fact that the control environment, the ethical leadership and the tone at the top has given we market players enough assurance that we will not get back to the days of unsustainable debt,” he said.
He urged policymakers to sustain fiscal discipline and ensure that future borrowing is guided by economic sustainability and value for money.
