The International Monetary Fund (IMF) has warned that Ghana could face significantly higher gross financing needs in the coming years, with the figure projected to peak at more than 16% of Gross Domestic Product (GDP) in 2028.
The IMF also raised concerns about growing debt refinancing pressures, particularly due to the concentration of maturities linked to Ghana’s Domestic Debt Exchange Programme (DDEP) in 2027 and 2028.
According to the IMF’s latest Country Report on Ghana, vulnerabilities in the domestic debt market remain high, largely because the government continues to rely heavily on Treasury bills and other short-term domestic debt instruments.
Ghana Faces Major Debt Rollover Pressures
The IMF noted that substantial debt rollover requirements in 2027 and 2028 could place additional pressure on Ghana’s public finances.
The concentration of Domestic Debt Exchange Programme-related maturities during the period could require the government to mobilise significant funds to refinance maturing obligations.
The Fund cautioned that Ghana’s reliance on short-term domestic borrowing could increase exposure to interest rate, liquidity and refinancing risks.
IMF Raises Concern Over Treasury Bill Dependence
The IMF further warned that the situation could be compounded by the significant exposure of Ghanaian banks and other financial institutions to government securities.
According to the report, financial institutions’ large holdings of government debt could amplify risks within the domestic financial system, particularly if the government needs to raise substantial amounts of money from the local market.
The Fund also indicated that the capacity of Ghana’s domestic debt market to absorb additional government borrowing could be limited.
The warning highlights the importance of effective public debt management, fiscal consolidation and prudent government borrowing as Ghana works to maintain economic stability and meet its debt restructuring commitments.
Ghana’s ability to manage its financing needs and upcoming debt maturities will remain critical to the country’s economic recovery, investor confidence and long-term debt sustainability.
Source: newsthemegh.com