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Professor Peter Quartey, the Director of the Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana, has cautioned the government against an immediate return to the capital market for loans.
He urged the government to focus on multilateral financing and to be more aggressive in increasing domestic revenue mobilisation to support the country’s development objectives.
Prof Quartey, a Development Economist, gave the caution during his inaugural lecture as a Fellow of the Ghana Academy of Arts and Sciences in Accra on Thursday.
The lecture was on the topic: "Debt, investment, and growth in Ghana: Did we borrow to consume?" It addressed key issues around Ghana’s debt and development financing.
It was attended by economic and financial professionals, industry players, policymakers, and students from several Senior High Schools.
Dr. Cassiel Ato Baah Forson, the Finance Minister, announced last Tuesday, during the 2025 budget presentation, that the government would cautiously reopen the domestic bond market.
However, Prof. Quartey warned that loans from the capital market had proven to be expensive and unsustainable for Ghana’s development financing.
He urged the government to limit its reliance on such loans.
Ghana’s debt stood at 42.9 per cent in 2013, below the International Monetary Fund’s (IMF) debt sustainability threshold of 50 per cent debt to Gross Domestic Product (GDP).
Since then, the debt has been rising, reaching a record high of 82.9 percent in 2023, before reducing to about 76 percent in 2024.
“Why the rush to go to the capital market?” Prof Quartey questioned, noting that borrowing from the capital market without investing those funds in productive ventures had led to unsustainable debt.
“[The capital market] is where we went to, and we are having these problems. And you still want to quickly finish giving people a haircut and go to the capital market… I want to sound this caution! Borrow less from the capital market and at reasonable interest rates,” he emphasised.
Prof. Quartey urged caution when borrowing, particularly from Eurobonds and other capital market funds, which he described as too expensive and unsustainable.
“We ought to shy away from them. Let us get more multilateral and domestic sources of funding. They are cheaper,” he said.
He lamented the habit of successive governments borrowing at high rates from the capital market and using a significant portion of those funds for public sector salaries and interest payments, particularly since 2015.
Emerita Prof Takyiwaa Manuh, Vice President of the Arts Section of the Ghana Academy of Arts and Sciences, also expressed concern about the country’s debt situation.
She said, “The debtor must eat, but the debtor must be careful of what they eat.”
Prof. Manuh expressed confidence that Prof Quartey’s lecture would spark further discussions to help improve the country’s finances.
She called on policymakers to consider and implement policy proposals from academia to improve the living conditions of the people.

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