IMF Urges Ghana to Borrow Wisely, Avoid Costly Debt Mistakes
Fund stresses reliance on concessional financing over expensive international loans
- IMF urges Ghana to avoid repeating past mistakes of excessive and expensive borrowing
- Priority should be given to low-interest financing from multilateral institutions
- IMF limits external borrowing, aims to extend domestic debt maturities
The International Monetary Fund (IMF) has warned Ghana against repeating past errors of excessive and high-cost borrowing.
Speaking in an interview, IMF Resident Representative to Ghana, Dr. Adrian Alter, urged the government to prioritise concessional loans and adopt a balanced borrowing approach under the ongoing IMF-supported programme.
“On the borrowing side, we have advised the government to be extremely prudent—not to go back to the same mistakes of excessive and expensive borrowing in the past,” Dr. Alter said.
He stressed that Ghana should focus on low-interest loans from multilateral institutions like the World Bank and African Development Bank, rather than the high-cost international capital markets.
“When concessional financing is available from agencies such as the World Bank, African Development Bank, and the IMF, there’s no need to tap the international market, where interest rates are currently extremely high,” he added.
Dr. Alter noted that although global financial pressures have slightly eased, borrowing costs remain elevated. With Ghana’s current credit rating, any international loans would likely carry interest rates of 10% or higher.
The IMF programme also places clear limits on external borrowing to safeguard debt sustainability and ensure compliance with creditor agreements. Currently, Ghana’s borrowing mix is roughly 70% domestic and 30% external. The Fund is working with the government to extend the maturity of domestic debt beyond the current one-year average.
Dr. Alter expressed optimism that by early 2026, conditions could allow Ghana’s domestic bond market to reopen, offering a more stable and diversified financing landscape.
The IMF continues to closely monitor Ghana’s performance under the Extended Credit Facility programme, which aims to restore macroeconomic stability, maintain debt sustainability, and support growth.
