The World Bank has delivered a blunt message to Ghana’s new administration: stay away from the Eurobond market until the economy is firmly on a sustainable path.

In its latest report on the country’s fiscal outlook, the Bank warns that “the new government administration should also refrain from a hasty return to the Eurobond market, which international investors would interpret as taking the easy way out.”

Instead, the Bank says, government must focus on rebuilding credibility through tough reforms, fiscal discipline and transparency, not fresh borrowing.

“Credibility cannot be rebuilt through fresh borrowing but only through discipline, transparency, and politically difficult reforms,” the report stated.

It urged strict adherence to the Medium-Term Debt Management Strategy and full disclosure of the Annual Borrowing Plan to reassure both investors and citizens.

The World Bank’s caution comes with a sobering reminder of Ghana’s track record: “Sudden macroeconomic stops and crises have led the country to request a record number of IMF programmes, remaining under active IMF programmes for 40 out of its 68 years of history.”

According to the report, Ghana’s 2022 financial meltdown “was not caused by COVID-19 or the Russia-Ukraine war but by years of fiscal indiscipline, excessive borrowing, and weak public financial management.”

Easy access to Eurobond markets over the past decade, it added, encouraged short-term politics and delayed reforms, leaving the economy exposed when shocks arrived.

Even with a debt restructuring deal and IMF support, the Bank insists the danger is far from over.

“Reestablishing credibility will take time, but the process can start immediately,” it said, pressing the government to use its post-election momentum to push through politically challenging changes.

President John Mahama appears to share that sentiment. “We have survived without going to the capital markets. We’ve survived without borrowing.

“As the President, I would not favour a quick return to the international capital market. I think we should go like this for a while and consolidate the economy before we look at external financing,” he said.

For the World Bank, the enforcing fiscal rules, widening the tax net and overhaul state-owned enterprises, particularly in the energy and cocoa sectors is crucial for Ghana.

Without decisive action, the Bank cautions, Ghana risks slipping back into the cycle of crisis and bailout that has defined much of its post-independence history.

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