Economist and Professor of Finance at the University of Ghana Business School (UGBS), Prof. Godfred Bokpin, has issued a stern warning to the government regarding its plan to reopen the domestic bond market to foreign investors. Speaking on the Joy Super Morning Show on Tuesday, March 3, 2026, Prof. Bokpin argued that while attracting foreign capital may seem like a quick fix for liquidity, it carries the significant risk of reclassifying domestic debt as external debt, potentially undermining Ghana’s long-term debt sustainability goals.
The warning follows the Ministry of Finance's announcement that the three-year freeze on new domestic bond issuances—initially implemented during the 2023 Domestic Debt Exchange Programme (DDEP)—has officially expired. With the government looking to pivot away from expensive, short-term Treasury bills toward longer-dated bonds, there is a growing temptation to allow non-resident investors back into the fold. Prof. Bokpin, however, describes this potential influx as "hot money"—volatile capital that can exit the country at the first sign of global or local instability.
"If we allow foreign investors to dominate our local bond market again, we are essentially turning a cedi-denominated problem into a dollar-denominated crisis," Prof. Bokpin explained. He noted that when foreign investors sell off their local bonds to exit the market, they demand US Dollars, putting immense pressure on the Cedi and depleting the Bank of Ghana’s foreign reserves. He further cautioned that this shift could complicate the government's current recovery programme with the International Monetary Fund (IMF), as it blurs the lines of debt classification and increases exposure to external shocks.
Prof. Bokpin is instead advocating for a "low-cost, high-achievement" economic model that prioritizes domestic institutional investors, such as pension funds and insurance companies. He argued that the government must first demonstrate a "clear exit plan" from the IMF programme by locking in fiscal discipline and reducing wasteful expenditure before courting foreign bondholders. "The market is ready for local issuance because of the 'shock therapy' of 2025, but we must be careful not to walk back into the same trap that led us to the DDEP in the first place," he added.
The Ministry of Finance and the Bank of Ghana have yet to finalize the rules for the new bond issuances, but the debate ignited by Prof. Bokpin has already reached Parliament. As the government prepares its first post-freeze bond auction, the focus remains on whether it will heed the call for caution or risk the volatility of international capital to meet its 2026 financing needs.
