IMF Backs Ghana Recovery, Warns on Reform Reversals
International Monetary Fund signals progress but urges continued discipline as it considers new policy support instrument.
Abubakar Ibrahim | StatsGH |
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Ghana's economic growth surpassed expectations in 2025. This was driven by broad economic activity and high gold exports. Fiscal performance strengthened significantly. The primary surplus in 2025 exceeded program targets. The nation's debt ratio also dropped sharply. Most key economic targets under the program were met. However, some structural reforms faced delays. The IMF warned that the global environment remains uncertain. Conflicts like the war in the Middle East could impact Ghana. This could happen through rising energy, food, and fertilizer prices. The IMF stressed the need for continued prudent policies. Strengthening resilience is crucial in this volatile period.
Ghana has made good progress in restructuring its domestic and external debt. This has improved the country's debt outlook. Agreements for debt relief have been reached with about half of official creditors. Negotiations with remaining creditors are ongoing. The successful return of domestic treasury bond issuance this year is a positive sign. It shows improved investor confidence. The IMF will consider a new 36-month Policy Coordination Instrument. This aims to sustain reforms beyond the current bailout. The proposed PCI will focus on fiscal discipline and debt sustainability. It will also support transparency, governance, and financial sector stability. Economic diversification is another key goal. The IMF indicated that a reduced primary surplus target is possible. This would still support debt sustainability if reforms continue.
The IMF raised concerns about the Bank of Ghana’s Domestic Gold Purchase Programme. Losses linked to this initiative highlight risks. These are called quasi-fiscal activities. Such activities weaken the central bank’s financial health. The IMF urged increased transparency. They want limitations on quasi-fiscal activities. The Fund called for protecting the Bank of Ghana’s balance sheet. Future costs related to these programs must be in the national budget. This ensures accountability and oversight. In the banking sector, progress in recapitalizing banks was welcomed. However, vulnerabilities remain. State-owned banks and specialized deposit-taking institutions are a concern. High levels of non-performing loans, which are loans that borrowers are not paying back, also pose risks. The IMF also called for deeper reforms in the energy and cocoa sectors. This includes reducing losses at the Electricity Company of Ghana. Clearing arrears and lowering generation costs are priorities. Finalizing private sector participation in electricity distribution is also urged. For cocoa, reforms are needed to secure COCOBOD's long-term financial health. More frequent farmgate price adjustments are recommended. Measures to cut costs and improve efficiency are also important. The IMF also pushed for stronger anti-corruption measures. This includes public disclosure of asset declarations. The Fund warned Ghana against repeating past mistakes. This includes cycles of fiscal imbalances and rising debt. Sustained reforms and prudent policies are essential. They will protect the gains made under the current program.