World Bank Warns Ghana Risks Falling Further Behind as Capital Markets Lag
By Praisebell Rosemond Larbi
The World Bank has issued a stark warning that Ghana risks falling further behind its global peers unless it undertakes urgent reforms to strengthen and expand its capital markets. At a seminar in Accra on “Financing Firm Growth: The Role of Capital Markets in Low- and Middle-Income Countries,” Robert Taliercio O’Brien, the Bank’s Country Director for Ghana, Liberia and Sierra Leone, said Ghana’s slow progress contrasts sharply with nations that were on similar economic footing three decades ago.
O’Brien explained that since 1990, firms across low- and middle-income countries have raised an estimated US$4 trillion through equity and bond markets. Over this period, cumulative net issuance quadrupled in middle-income economies and expanded eightfold in low-income countries. This surge in capital mobilisation, he noted, has enabled thousands of younger, more innovative firms to scale up, boost productivity, create jobs and drive rapid industrialisation.
However, Ghana has not matched these gains. “Ghana trails countries such as China, India and Vietnam, which were all low-income countries in 1990 along with Ghana. Many of them have taken off, but Ghana has had an up-and-down path,” O’Brien said.
He described Ghana’s capital market as narrow and shallow, with only 36 listed companies on the Ghana Stock Exchange and just seven firms boasting outstanding corporate bonds. Instead, the domestic bond market is overwhelmingly dominated by government securities, crowding out long-term private sector financing.
This structural weakness comes at a time when Ghana faces massive investment needs. The MSME financing gap alone is estimated at US$11 billion, equivalent to 18% of GDP. Private-sector credit remains strikingly low at 9% of GDP, far below Senegal’s 30% and Côte d’Ivoire’s 23%. “There is no reason why Ghana should not be matching or surpassing these peers,” O’Brien added.
Ghana’s infrastructure deficit further compounds the challenge. The country requires about US$37 billion annually over the next decade, yet concessional financing is shrinking. Official development assistance is falling, and the World Bank’s IDA allocation of US$1.5–2 billion over the next three years is “just a drop in the bucket,” he stressed. “The capital market must be jumpstarted.”
Despite these concerns, O’Brien acknowledged recent improvements in Ghana’s macroeconomic landscape following the Domestic Debt Exchange Program. Growth is projected to rebound to 4.6% by 2026, inflation has moderated to 8%, and short-term interest rates have dropped to about 11%, while the fiscal balance has moved into surplus. “These are encouraging developments, but much more needs to be done,” he said.
He pointed to Ghana’s rapidly growing pool of long-term domestic savings as one of the most promising opportunities. Pension funds and collective investment schemes have accumulated nearly US$7 billion, which could be channelled into productive investments if the capital market becomes more efficient and diversified. These funds, he noted, could play a transformative role in financing major infrastructure projects and supporting the government’s proposed 24-hour economy.
O’Brien emphasised that unlocking this potential will require deliberate reforms, stronger regulatory institutions and a clear national strategy that encourages more firms to list, issue bonds and access long-term capital.
“The question now is how to make Ghana’s capital markets a real engine for growth, just as other low-income countries managed to do over the past three decades,” he concluded.
