Senior Lecturer on the Ghana Institute of Administration and Public Administration (GIMPA), Dr Nyame Baafi, has opposed the federal government’s plan to re-enter the bond market, citing considerations over fiscal mismanagement and investor confidence.
His remarks comply with Finance Minister Dr Cassiel Ato Forson’s announcement within the 2025 Price range Assertion that the federal government intends to reopen the home bond market to increase the maturity profile of its debt.
Nevertheless, in an interview on Pleasure FM’s Prime Story on Thursday, March 12, Dr Baafi stated this transfer wouldn’t be in Ghana’s finest curiosity, given the nation’s present financial circumstances.
“I don’t help any thought of going again to the bond market, particularly when the Finance Minister has already admitted that the federal government has missed all its fiscal targets beneath the IMF programme,” he acknowledged.
He argued that Ghana’s present financial scenario makes borrowing from the bond market an unattractive choice, as traders will possible demand a better danger premium because of the authorities’s struggles to fulfill fiscal targets.
“The market is already reacting unfavourably to Ghanaian bonds. Issuing new ones now will solely improve borrowing prices and worsen our debt burden,” he warned.
Dr Baafi additionally criticised inconsistencies within the price range assertion, suggesting that it fails to align with knowledge from the Ghana Statistical Service. He famous that such discrepancies undermine investor confidence, because the nationwide price range is a essential supply of knowledge for potential traders Ghana’s financial outlook.
“I initially thought the price range would define how the federal government intends to increase the tax base. The Finance Minister talked about a goal tax-to-GDP ratio of 17.2%, however upon deeper evaluation, the precise projection stands at 16.1%, which is just a marginal improve from the 15.9% inherited from the earlier authorities. This raises considerations about income mobilization methods,” he defined.
Additionally, the Minority in Parliament has raised considerations concerning the authorities’s determination to reopen the bond market, describing it as ill-advised and dangerous for Ghana’s economic system.
Addressing the press on Thursday, former Minister of Finance Dr Mohammed Amin Adam warned that the federal government’s transfer to return to the home bond market is poorly timed and will have extreme penalties for the nation’s fiscal stability.
Learn additionally: Ato Forson attributes debt-to-GDP decline to NPP’s 37% Eurobond haircut
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