Economist and Dean of the University of Cape Coast (UCC) Business School, Professor John Gatsi, has urged the government to take urgent steps to repair the long-term domestic debt market to stabilize the country’s financial sector.
Speaking on The Big Issue on Channel One TV, Prof. Gatsi emphasized the importance of shifting from short-term borrowing to long-term instruments to restore investor confidence.
“Critically, T-Bill instruments are just liability management. So there is a turnover within a short period of time. We borrow in the long-term domestic market to do stuff. Now we are out of the external market, we are out of the long-term domestic market,” he noted.
He warned that the current overreliance on short-term Treasury bills creates an imbalanced debt structure, limiting investor options and weakening financial stability.
“We cannot continue to have a monopolized debt market where only Treasury bill instruments are available to investors, and he doesn’t have a choice, and he is supposed to allocate his portfolio mainly to a short-term instrument,” he stated.
Prof. Gatsi urged the government to act swiftly to revive the long-term debt market to allow investors to diversify between short-term and long-term instruments.
“That should be the focus of the president and his finance minister. We need to quickly repair the long-term domestic market so that we can begin to issue long-term instruments for investors. That will bring about some sanity into the debt market,” he stressed.
His call comes as Ghana navigates economic recovery efforts following the impact of debt restructuring and financial sector challenges.