Kwadwo Nsafoah Poku, a member of the New Patriotic Party (NPP), has cautioned the government against heavy domestic borrowing, warning that it could crowd out private sector investment and increase economic pressures.
Speaking on GHToday with Lily Mohammed on Tuesday, March 3, 2026, Mr. Poku urged caution despite celebrations over Ghana’s return to the bond market.
He argued that borrowing to build foreign reserves without boosting exports would be unsustainable.
“There’s no point going to borrow to put it in reserves. The only reason you build reserves is when you expand industry, export more, and your export earnings go into those reserves,” he said.
He also raised concerns about the government’s plan to finance an estimated GH¢77 billion of its budget through domestic bonds, noting that banks tend to prefer government securities over lending to businesses.
“When government goes back into the domestic bond market, the banks will rush to buy government bonds. They see government as low risk and the private sector as high risk,” Mr. Poku explained, adding that this dynamic makes it harder for entrepreneurs to access credit.
Reflecting on the Domestic Debt Exchange Programme (DDEP), he expressed sympathy for pensioners who suffered losses but suggested that banks heavily exposed to government bonds also bore responsibility.
He recommended reforms to reduce the proportion of pension and insurance funds invested in government securities, arguing that long-term funds should instead support private sector projects such as road infrastructure.
Source: Starrfm.com.gh/Abigail Praise Pabai
