Ghana Stock Exchange MD Calls for 60% Debt-to-GDP Cap to Ensure Economic Stability
By Praisebell Rosemond Larbi
The Managing Director of the Ghana Stock Exchange (GSE), Madam Abena Amoah, has reiterated the need for Ghana to maintain a debt-to-GDP ratio of 60% or lower to promote sustainable economic growth and stability.
Speaking at the National Economic Dialogue Tuesday March 4, 2025 themed “Resetting Ghana: Building the Economy we want together” at the Accra International Conference Center, Madam Amoah stressed that maintaining a sustainable debt threshold is crucial for macroeconomic stability, investor confidence, and long-term private sector growth. She warned that without such stability, efforts to develop the private sector and strengthen the economy could prove futile.
“In our discussions, we engaged with the Minister of Finance and made a strong case for setting a clear debt-to-GDP limit of 60%,” Madam Amoah revealed. “Without a stable macroeconomic environment, all the policies designed to promote private sector growth will be a waste of time.”
Her remarks come at a time when Ghana is grappling with high public debt, which has posed significant challenges to economic recovery. Ghana’s debt-to-GDP ratio stood at approximately 71.5% at the end of 2023, significantly above the recommended threshold for developing economies. This has raised concerns among investors and financial analysts about the country’s fiscal discipline and ability to manage future borrowing.
The Importance of Debt Sustainability
Economic analysts have long argued that an unsustainable debt burden can lead to increased interest rates, a weakened currency, and difficulties in accessing international capital markets. Ghana has already sought assistance from the International Monetary Fund (IMF) under an extended credit facility program to help restore economic stability. However, experts, including Madam Amoah, believe that without stringent debt management measures, the country risks falling into a continuous cycle of borrowing and financial distress.
A 60% debt-to-GDP ratio, according to financial experts, allows a country to balance development-financing needs while maintaining fiscal discipline. Exceeding this threshold often results in higher debt servicing costs, diverting government resources from critical sectors such as education, healthcare, and infrastructure development.
Private Sector Growth and Investor Confidence
Beyond debt management, Madam Amoah highlighted the crucial role of private sector development in driving economic recovery. She noted that for businesses to thrive and attract investments there must be a predictable economic environment with stable inflation, a well-regulated financial sector, and sound monetary policies.
The Ghana Stock Exchange has been a key player in mobilizing capital for businesses, offering an alternative source of financing beyond government borrowing. However, investor participation in the capital markets is largely influenced by macroeconomic stability. Madam Amoah urged the government to focus on policies that encourage both domestic and foreign investment.
“The private sector is the engine of growth, but investors will only commit their resources when they have confidence in the economy,” she stated. “This is why maintaining a disciplined fiscal policy is non-negotiable.”
The National Economic Dialogue and Future Outlook
The National Economic Dialogue serves as a platform for policymakers, economists, and industry leaders to discuss strategies for economic recovery and long-term development. This year’s discussions have centered on Ghana’s economic challenges, including inflation, exchange rate fluctuations, and debt restructuring.
Madam Amoah’s recommendation for a 60% debt-to-GDP cap aligns with global best practices for emerging markets. Countries such as Rwanda and Botswana have maintained strong fiscal discipline, ensuring that debt remains at manageable levels while prioritizing infrastructure and social investments.
With Ghana’s economy showing signs of gradual recovery following the COVID-19 pandemic and recent economic shocks, many experts believe that setting a strict debt limit could help restore confidence in the financial markets and position the country for sustainable growth. As the National Economic Dialogue continues, stakeholders are expected to present policy recommendations to the government, outlining concrete steps toward economic stability and resilience.
