THE INTERNATIONAL Monetary Fund (IMF) approved the release of $367 million loan to Ghana under its $3 billion Extended Credit Facility (ECF) arrangement, bringing total disbursements to $2.3 billion.
In a press release Monday, the IMF, while praising Ghana’s economic resilience and improved external sector performance, raised serious concerns over fiscal indiscipline, delayed reforms, and inflationary pressures that emerged ahead of the 2024 elections.
Strong Growth, But Fiscal Slippages Threaten Progress
According to the IMF, Ghana’s economy outperformed expectations in 2024 and early 2025, driven by robust activity in mining, agriculture, ICT, and construction coupled with strong gold and oil exports, alongside higher remittances, which boosted foreign reserves beyond IMF targets.
The Fund, however, stated that these gains were overshadowed by a sharp deterioration in fiscal discipline in late 2024, with election-related spending pushing inflation above program targets and delaying critical reforms.
It also noted that Ghana’s new administration has taken “bold corrective actions,” including tightening monetary policy, adjusting electricity prices, and enacting fiscal reforms to rein in deficits.
The Fund emphasised that sustaining these measures is crucial to restoring macroeconomic stability.
Election Spending and Inflation Woes
Preliminary data reveal significant fiscal slippages in the lead-up to the December 2024 elections, including a surge in government payables and missed revenue targets, the IMF stated, and stressed that inflation spiked, though recent trends suggest a return to disinflation.
It warned that without strict adherence to fiscal consolidation, Ghana risks derailing its recovery.
“The authorities must stay the course on fiscal adjustment and debt restructuring to ensure long-term stability,” said IMF Deputy Managing Director, Bo Li, as he stressed the need for stronger revenue mobilisation, expenditure controls, and reforms in state-owned enterprises (SOEs), particularly in the troubled energy and cocoa sectors.
Debt Restructuring Advances, But Challenges Remain
Ghana, IMF said, has made progress in restructuring its public debt, securing a Memorandum of Understanding (MoU) with official creditors under the G20 Common Framework, noting, however, that finalizing bilateral agreements and reaching deals with commercial creditors remain critical hurdles. It therefore cautioned that delays could undermine investor confidence and fiscal sustainability.
Banking Sector Vulnerabilities Persist
The Bank of Ghana (BoG), IMF said, has tightened monetary policy to curb inflation and rebuild reserves. The Fund however flagged lingering risks in the financial sector, urging stronger oversight of undercapitalised banks and faster implementation of reforms at state-owned banks like the National Investment Bank (NIB).
“The corrective measures are a step in the right direction, but Ghana must avoid repeating past mistakes,” the IMF warned, adding: “Structural reforms, debt sustainability, and consistent policy implementation will determine whether this recovery is durable.”
