President John Dramani Mahama’s recent declaration that Ghana will not hastily return to the international bond markets is more than a matter of fiscal policy. It marks a symbolic shift from nearly two decades of dependence on external borrowing, a practice that has defined much of the country’s political economy.
Speaking at a press briefing in Accra, Mahama emphasized that Ghana must first consolidate recent gains before considering another Eurobond issue. “Who could have imagined a few years ago that Ghana’s economy could run without external borrowing? And yet, here we are,” he told journalists, underscoring his government’s cautious approach.
Indeed, Ghana has managed a rare turnaround in its fiscal balance, moving from a deficit of –3.4 percent to a surplus of 1.1 percent in just over a year. With the government projecting to surpass its 1.5 percent target by the end of 2025, Mahama stressed a simple lesson: fiscal discipline works. For him, the priority is expenditure control, not a quick return to international credit markets.
Ghana’s experience with Eurobonds, however, tells a turbulent story. The country made history in 2007 under President John Kufuor when it became the first sub-Saharan African nation outside South Africa to issue a Eurobond, raising $750 million. That moment was celebrated as financial maturity, but the euphoria soon gave way to an entrenched pattern of borrowing. Successive governments leaned heavily on the markets, with Mahama himself issuing bonds in earlier terms, and later, under Nana Akufo-Addo, borrowing soared to over $13 billion between 2017 and 2021.
The easy inflow of funds provided governments with quick fixes for fiscal gaps and headline projects, but at a steep cost. By 2022, Ghana had defaulted on most of its external debt as servicing obligations devoured more than half of state revenues. Market confidence collapsed, forcing the government into painful restructuring with creditors and a bailout from the International Monetary Fund.
For many citizens, the crisis was a stark reminder of how unsustainable debt-driven governance had become. Mahama’s present refusal to rush back to borrowing, therefore, carries symbolic weight. It signals a willingness to learn from past mistakes and a desire to project discipline both to Ghanaians and international investors.
Still, this approach is not without risks. Without external capital inflows, the government will lean heavily on domestic resources, which could crowd out private sector borrowing. Yet, Mahama’s insistence on consolidation over short-term financing could help rebuild long-term credibility, something global investors — fatigued by Ghana’s past debt cycles — may eventually reward.
This position represents a striking departure from the past. Previous administrations often treated market re-entry as a reflex, rushing back as soon as conditions improved. Mahama, by contrast, seems determined to delay gratification, showing that Ghana can sustain itself without leaning on debt at the first sign of recovery.
Global investors are watching closely. Credit ratings have improved slightly, bond prices have stabilized, and cautious optimism is returning. Yet analysts warn that moving too quickly could undo fragile progress. By waiting, Ghana aims to lower future borrowing costs and rebuild confidence on stronger terms.
Importantly, Mahama’s stance is not a permanent retreat from external financing. Ghana will still need foreign capital for infrastructure and development. The difference lies in reframing borrowing as a deliberate, strategic decision rather than a default policy. Politically, this is about proving that Ghana can live within its means after years of crises and IMF interventions. Economically, it is about laying the groundwork for a more disciplined fiscal future.
Whether this reset endures remains to be seen. But Mahama’s current posture signals a potential turning point — one that could redefine Ghana’s relationship with debt and shape its credibility on the global stage.
