The World Bank has cautioned Ghana against piling its external debt and exceeding the sustainability threshold.
According to the bank, Ghana is currently rated as a moderate to high-risk debt distressed country and so must tread cautiously.
The government last week raised US$3 billion on the Eurobond market.
The transaction was hailed as a success story following the issuance of a 41-year bond — the longest-dated issued by an African country.
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The Country Director of World Bank-Ghana, Pierre Frank Laporte, indicated that the country must not cross the acceptable thresholds of debt sustainability.
“Countries, especially developing countries have to borrow because most of us do not have adequate resources to develop. We have to borrow to develop, but you have to borrow responsibly. At the moment Ghana’s debt situation based on World Bank’s description is a country at a moderate rate to high risk of debt distress, so of course, the country has to be careful,” he said.
“…But the country is at a stage where things are critical. I am confident that the Finance Minister and his team are fully aware of that, as we discuss all the time. Borrowing is not a bad thing, but you have to borrow on the right terms, the right amount and in the right way. Countries have debt strategies, so like I said, I am confident that the Ghanaian authorities know what they’re doing.”
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