**1. Introduction**

In recent years, financial markets have been emerging in Ghana as a result of various economic and financial reforms. This includes the development of private sector banks, the liberalization of exchange rates, the deregulation of interest rates, and the introduction of Treasury bills. In addition, the country has seen an increase in crossborder investments and the emergence of venture capitalists [1]. This paper examines the implications of these emerging financial markets for Ghana and the public financial management crisis it faced in 2022. It looks at the challenges posed by the country's debt restructuring process, which has been complicated by the fiscal crisis and the uncertain economic outlook. It also examines the prospects for a sustainable financial system in the country, drawing on the experiences of both regional and international investors. Ghana has recently been faced with a major public financial management crisis, due to

a combination of factors, including declining oil and gold prices, the depreciation of the local currency and massive debt accumulation. In response, the Ghanaian government, in collaboration with the International Monetary Fund (IMF), has implemented several fiscal reforms and instituted a debt restructuring process. This has been further complicated by the uncertain global economic outlook, which has limited both the availability of external financing and the government's ability to effectively manage fiscal resources. The fiscal crisis in Ghana is part of a wider challenge facing many African economies and is linked to the broader context of debt sustainability and the need for improved financial oversight and transparency [2]. The country's financial markets have been relatively small and underdeveloped, with a small number of participants and limited depth and liquidity. Despite this, recent years have seen a significant rise in the importance of these markets and growing flows of capital. Private sector banks have grown in number and foreign investors have become increasingly involved. Furthermore, the Ghanaian government has taken steps to improve the regulatory environment, including the introduction of a financial sector recovery program and the development of an online platform to facilitate direct lending by banks [3].

The emergence of these financial markets has helped to provide the country with increased access to capital and has provided the government with additional channels to manage its debt and reduce its exposure to financial crisis risks. However, there are still significant uncertainties surrounding the stability of Ghana's financial sector. An important challenge is a potential for a liquidity crisis, as a result of insufficient levels of capital and borrowing capacity. Furthermore, the increasing global focus on debt transparency and risk assessment has placed pressure on the government to ensure that debt restructuring takes place in a responsible and transparent manner. Ghana has presented both opportunities and challenges for the country. On the one hand, it has enabled the government and the private sector to access more capital and better manage their debt. On the other hand, it has created uncertainty about the sustainability of the financial system and posed significant challenges to the debt restructuring process [4]. As Ghana continues to grapple with its public financial management crisis, it is important that the government is able to effectively manage the risk posed by the financial markets and ensure that the country's financial system remains stable and sustainable. Financial markets play an important role in the economic development of a country, and their current development is of great importance to Ghana. Ghana's financial markets have recently emerged, and they are faced with numerous challenges which could have a significant impact on the country's public financial management and debt restructuring strategies [5].

Financial markets have always been an important part of any economy, and their role in the development of Ghana is no exception. Financial markets play a major role in helping to allocate funds efficiently, allowing macro-economic demands and supply to interact in a plan that is profitable to both individuals and businesses alike. In Ghana, a number of domestic and international financial markets have been established, ranging from the world-renowned international stock markets, to the more obscure and recently-established domestic investments [6].

The concept of financial markets in Ghana dates back to the early twentieth century, when the British Gold Coast was established and the Bank of Ghana was established in 1957. The Bank of Ghana would become the main regulator of the financial markets in Ghana, and would be responsible for setting the interest rates, controlling the money supply and issuing credit. Prior to the 1950s, Ghana was heavily reliant on the cocoa bean for its economic growth and development. This agricultural commodity provided most of the income for the country and its people. However, the 1950s saw a shift away from the reliance on cocoa to the emergence of financial markets, which started to

*Emerging Financial Markets in Ghana and Public Financial Management Crisis Uncertainties… DOI: http://dx.doi.org/10.5772/intechopen.111373*

provide a more reliable stream of income and capital to the nation. One of the most important financial markets in Ghana is the Ghana Stock Exchange, which was established in 1990 [7]. The Ghana Stock Exchange is the largest and most liquid of all the financial markets in Ghana, and it plays an important role in the nation's economy by allowing businesses to list their securities and attract private investments. The Ghana Stock Exchange has been successful in helping to attract foreign capital to the nation, as a result of which international financial institutions such as the World Bank and International Monetary Fund have provided the country with much needed credit. In addition to the Ghana Stock Exchange, other financial markets have sprung up such as the Ghana Investment and Securities Exchange, the Ghana Securities Exchange, the Ghana Commodities Exchange, and the Ghana Derivatives Exchange [8].
