Ghana: Climate Finance, Debt Restructuring and Development

Written by
Maya T. Woser
Fernando Pernas
Madeleine Granda
Achinthya Sivalingam
Jing Xie
April 11, 2024

by Maya T. Woser '24, Fernando Pernas '24, Madeleine Granda '25, Achinthya Sivalingam '24, and Jing Xie '25

for Annotations Blog

Proposed by the SPIA Africa Policy Network (APN), this trip explored how Ghanaian policy- and changemakers are grappling with the realities and tradeoffs of debt distress, including promoting sustainable and inclusive economic growth, financing climate adaptation and resilience, and balancing pressures from international creditors with the needs and concerns of Ghanaian citizens.

This trip was proposed to help participants gain an interdisciplinary and cross-cutting vista of Ghana’s debt crisis through targeted meetings with a wide range of stakeholders, including Ghanaian government ministries, representatives of international organizations, development NGOs, local climate advocates, and private firms. Students will also build professional connections for summer internship planning and longer-term career development.

Policy Trip Team photo at the Bank of Ghana

Throughout this 8 day policy trip, 12 graduate students from the School of Public and International Affairs (SPIA) met with critical stakeholders in Accra, Ghana to discuss issues across macroeconomic situations, debt distress, and climate financing. Below is a complete list of stakeholders we met: 

  • Government Agencies: Bank of Ghana (BoG) and Ministry of Finance (MoF)
  • International Organizations: World Bank Group (WBG), African Development Bank (AfDB), United Nations Development Programs (UNDP), International Finance Corporation (IFC), and United States Agency for International Development (USAID)
  • Local Organizations: Wangara Green Ventures, African Center for Economic Transformation (ACET), Caritas Africa, and EcoBank Ghana. 

We thank the Journal of Public and International Affairs for the opportunity for us to share individual reflections from various visits on topics of Climate Finance, Debt, and Debt Restructuring and Development.

1. Climate Finance: More, Better, and Faster

By Maya T. Woser

Maya Woser

Maya is a second-year Master in Public Affairs candidate at Princeton’s School of Public and International Affairs. Prior to SPIA, she worked in economics and data-focused roles in the private and nonprofit sectors, most recently as a Research Manager working on agriculture and climate adaptation programs in India. This summer, she interned with the United Nations Economic and Social Commission for Asia and the Pacific in Bangkok, Thailand. Originally from Delhi, India, Maya completed her B.A. in International Politics and Economics from Middlebury College as a Davis United World College Scholar.


Climate finance came up in most, if not all, of our meetings. Everyone was thinking from different angles about how to unlock more climate finance, marry development and climate goals, and do so in the current macroeconomic climate. At the Ministry of Finance, we discussed the pathways to explore linking debt restructuring to climate, including some talk of debt-for-climate swaps. At EcoBank, Ghana's largest commercial bank, we spoke about their certification by the Green Climate Fund, which enables them to access funding for climate-focused projects. At Wangara Green Capital, a climate impact investment fund, the team discussed innovation arising as a function of necessity and the challenge of entrepreneurship in a high-interest rate environment. 

These conversations left me thinking about how unsurprisingly, everyone was deeply aware and committed to pursuing climate goals and saw the connections with larger macroeconomic challenges. However, they were coming up against classic development mobilization problems. Things move too slowly and are often uncoordinated. With a huge range of actors, each pursuing separate agendas and beholden to different investors or funders, and a global financial architecture not designed for equity or efficiency, the climate and development conversation is simply not moving at the pace it needs to be. For example, despite EcoBank joining the GCF more than three years ago, no funding or projects have yet been announced for EcoBank. 

Climate and debt are central to the current development discourse, but their connection is still in its infancy. The challenge, however, is that debt and climate crises are already plaguing countries. While leaders and citizens of developing countries have been pushing this urgent agenda, whether looking at Africa's Climate Summit or the Bridgetown Initiative, development institutions aren't responding at the pace they need to. There is an urgent need for development financing institutions to accelerate the pace of conversations and be willing to consider never-before-tried instruments and solutions in supporting both macroeconomic stability and climate goals. There is a necessity to reform global financial architecture to mobilize funds quicker, on different terms, and to link separate goals together where possible. Additionally, development actors need to work collaboratively on agendas and do so beyond the national context.  


2. Debt and Debt Restructuring: Navigating Economic Turmoil 

By Fernando Pernas 

Fernando Pernas

Fernando is a second-year Master in Public Affairs candidate at Princeton School of Public and International Affairs, where he is a Fulbright Scholar. Prior to joining SPIA, he worked for the Dominican Government’s Ministry of Industry and Commerce as head of the economic analysis department. He also worked as an economic analyst at the Dominican Republic Central Bank and the Ministry of Economy, Development, and Planning. A native of Santo Domingo, Dominican Republic, Fernando laid the foundation for his career in economics with a degree from the Mother and Teacher Pontifical Catholic University.


In reflecting on our policy trip to Accra, Ghana, learning about the proactive measures the Ghanaian government took in the wake of a severe debt crisis was profoundly enlightening. Amidst a default on its sovereign debt due to lost access to international capital markets, Ghana embarked on a comprehensive debt restructuring operation in December 2022 along with an IMF program of substantial policy reforms. This initiative demonstrated the government's ability to navigate exceptionally challenging circumstances with commendable skill and determination. The successful restructuring of domestic debt last summer, while adeptly circumventing a potential banking sector crisis, alongside the recent agreement with the Official Creditors Committee, marks significant progress toward stabilizing the economy. These steps pave the way for negotiations with commercial creditors and signify a crucial phase in Ghana's economic recovery.

During our engagements with officials from the Bank of Ghana and the Ministry of Finance, the complexities of managing a nation's economy through a crisis became apparent. The discussions revealed how the Ghanaian economy is now showing signs of stabilization after experiencing severe inflationary and currency devaluation episodes. With inflation on a sharp decline and the Ghanaian Cedi maintaining stability since mid-2022, there's a sense of cautious optimism. However, the acknowledgment that much work remains is palpable. The recent economic instability is a stark reminder of the vulnerabilities to fiscal overreach and external shocks. Yet, it also opens up an opportunity for profound structural reforms under the IMF program that bolster domestic revenues, improve spending efficiency, and strengthen debt management practices. The commitment to running primary surpluses by 2024, as indicated by the 2022 IMF program, along with efforts to normalize monetary policy and curtail government expenditure, are pivotal strategies to encourage private investment and propel Ghana on a sustainable development path.

Our visit showed the importance of sound fiscal management and the role of international cooperation in navigating a country out of economic turmoil. The firsthand accounts from the Ghanaian officials provided insight into the immediate responses that mitigated the economic downturn and highlighted the ongoing challenges and strategies for sustainable growth. This experience has been invaluable in understanding the intricacies of economic policy-making and the critical role of governance in ensuring economic stability and development.

Ghana Policy Trip team at the African Development Bank


3. Development: Insights into Capacity Building, Democracy and Governance 

By Madeleine Granda 

Madeleine Granda

Madeleine is an MPA candidate at Princeton University’s School of Public and International Affairs, where she studies international development. Before arriving at Princeton, Madeleine worked in international development and for the U.S. Senate. Most recently, she served as professional staff for the U.S. Senate Appropriations Subcommittee on the Department of State, Foreign Operations, and Related Programs where she oversaw U.S. foreign assistance programs. She is from Vermont, USA, and holds a B.A. in International Studies from Dickinson College.


My week in Accra, Ghana as part of a policy trip through Princeton has been an immensely enriching experience. I am grateful for the opportunity to immerse myself in the dynamic Ghanaian policymaking landscape. After discussing concepts in the Africa Policy Lab through the Julis Romo Rabinowitz Center this year, being on the ground in Accra allowed me and my classmates to witness firsthand their nuances and complexities.

The meetings with USAID and UNDP were particularly illuminating. During our discussion with USAID, we delved into critical issues including capacity-building, challenges of accessing climate financing, and the intricate dynamics of government over-spending, whether due to corruption or technical capacity constraints. The interplay between central and local governments in budgetary mismanagement and the disruption of reform efforts due to the upcoming election provided an enriched contextual understanding to our academic knowledge.

Similarly, the UNDP meeting shed light on their efforts to facilitate institutional strengthening and support Ghana's climate objectives under the Paris Agreement. UNDP officials also voiced concern over low youth voter turnout and declining interest in democratic governance, highlighting persistent challenges facing democratic processes in the region. Extremism in neighboring countries and our conversations about the upcoming presidential election with USAID and UNDP reinforced classroom discussions about the connection between economics and instability. While Ghana may be on its way to weathering its current economic storm, strengthening its democracy may prove to be an even more formidable challenge. 


4. Development: Stakeholder Strategies. Private Sector and Civil Society Involvement. 

By Achinthya Sivalingam

Achinthya Sivalingam

Achinthya is a second-year Master in Public Affairs Candidate at the Princeton School of Public and International Affairs. Most recently, Achinthya supported policy and advocacy strategies for the climate adaptation, agricultural development, and nutrition portfolios at the Bill and Melinda Gates Foundation. Prior to her time at the foundation, Achinthya was an electoral and community organizer and researched land rights and policy in India at the Centre for Policy Research. Born in Coimbatore, India, and raised in Columbus, Ohio, Achinthya studied politics and economics at the Ohio State University where she was a Morrill Scholar. 

Across our meetings with government agencies, it was clear that their raison d'etre is to move any available economic levers to prevent the country from entering a complete financial crisis. The goal is damage control from the tumult of larger global macroeconomic shocks amidst a debt crisis. While the crisis can be attributed to policy failures in pursuing development tied exclusively to commodities without the diversification necessary to build resilience, this does not exempt it from also being a consequence of historical exploitation. Ghanaian debt exists in the context of slavery and colonization, and, perhaps now, neocolonialism. 

The long-term solution to the Ghanaian debt trap involves developed countries reckoning with the historical origins of their economic success paired with reorienting the Ghanaian economy. However, most stakeholder strategies are narrowly focused on the latter. Our first meeting of the week with the Bank of Ghana introduced us to the credit rating agencies' central role in the COVID-19 debt crisis. Credit rating agencies downgraded Ghana as the pandemic hit, limiting its access to international capital markets. The downgrade predetermined a financial crisis as it left the country without the necessary capital to survive the pandemic or service existing debts. In 2020, Ghana’s debt service to revenue ratio was the highest it has ever been at 127%. 

The International Finance Corporation Ghana country strategy is focused on increasing private sector investments into the country while limiting regulation. Reasoning that there is low government capacity to diversify the economy and manage its public assets, the IFC sees itself as a partner to move increased investments in industry and manufacturing to encourage development. The Ghanaian context paired with the IFC’s strategy was starkly reminiscent of the World Bank’s destructive Washington Consensus. Even more so when questions about social protections and transitioning to a green economy lingered unanswered throughout the conversation, despite the organization’s commitment to the World Bank’s mission of working to reduce global poverty. 

Our meetings with civil society organizations grounded us in the realities of the people in whose names these debts are ascribed. Sir Sam Zan Akologo is a longtime Catholic debt justice organizer in the region and has seen the material effects of the national debt on Ghanaian communities and the international levers that both enable and alleviate these circumstances. At our meeting, Sir Zan touched on the experiences of everyday Ghanaians, historical injustices, and the path forward for a more just international financial system. Previously having organized for the Jubilee 2000 movement, he now works on an advocacy campaign for the impending Jubilee in 2025. In the Catholic faith, the Jubilee occurs every 50 years and is a time when debts and sins are forgiven as a manifestation of God’s mercy. When asked about the operationalization of God’s moral command for next year, he smiled and explained that the strategy was primarily focused on IMF reforms.

In conclusion, the policy trip to Accra, Ghana offered important insights into macroeconomic challenges, particularly in climate finance, debt restructuring, and development. Our discussions with multiple stakeholders emphasized the need for coordinated action and innovative solutions to address these issues. It highlighted the importance of international cooperation, fiscal responsibility, and inclusive development strategies for Ghana’s sustainable development. 

Jing Xie

Jing is a first-year Master of Public Affairs candidate at Princeton’s School of Public and International Affairs. Prior to SPIA, she worked at the International Monetary Fund (IMF) as a macroeconomic analyst, supporting economists in monetary policy and macro-modeling projects. Jing also designed, developed, and delivered nowcasting tools for government officials from 30+ developing countries as a nowcasting lecturer. Her career passion lies in promoting economic inclusion in sub-Saharan Africa and Southeast Asia. She received a B.B.A in Economics and Finance from George Washington University in 2020.