World Bank warns Ghana against excessive borrowing, says Ghana risk being classified as a high debt distress country

The World Bank has cautioned Ghana against excessive borrowing amidst concerns that the country risks being classified as high debt distress country if the situation persists.

World Bank Country Director Pierre Frank LaPorte

This means that if Ghana keeps borrowing from other countries, it may not be able to pay in the future.

The caution comes a day after the country successfully raised $3 billion Eurobond which was five times oversubscribed.

Speaking to the media after a courtesy call on the Speaker of Parliament, the Country Director of World Bank, Pierre Frank Laporte said though every country will have to borrow it must be cautious of the quantum of borrowing.

Countries especially developing countries have to borrow because most of us do not have adequate resources, we have to borrow to develop, but we have to borrow responsibly. At the moment, Ghana’s debt situation according to World Bank description is a country at a moderate rate to high risk of debt distress; of course, yes, the country has to be careful,” said Mr Laporte.

He added that “I’m confident the Finance Minister and his team are fully aware of that, we discussed all the time and borrowing as I said is not always a bad thing but you must borrow at the right terms, as best as most favourable as possible and the right amount and the right way.”

He, however, applauded the country for the economic progress made over the last couple of years but added there are important challenges that the nation needs to address.

Ghana’s total public debt stock increased by GHS6.3 billion between September and November 2019 to reach GHS214.9 billion in November 2019.

Of the total debt stock, domestic debt was GHS101.4 billion, of which GHS11.2 billion (3.8 per cent of GDP) represented bonds issued to support the financial sector clean-up.

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