The International Monetary Fund (IMF), has cautioned Ghana that the economic gains achieved so far under the Extended Credit Facility (ECF) programme, remain fragile and require sustained efforts to consolidate.
This warning, comes as the country continues to implement critical reforms aimed at restoring macroeconomic stability and addressing fiscal challenges.
According to the IMF, while some progress, has been made in stabilizing Ghana’s economy, the gains are vulnerable to external shocks, delays in policy implementation, and lingering structural weaknesses.
The Fund, highlighted that maintaining fiscal discipline, improving revenue mobilization, and ensuring the timely execution of reforms will be crucial to solidifying the recovery process.
“While encouraging continued financial system recapitalization and tackling financial sector legacy issues remain important, further reducing inflation and rebuilding international reserves hinge on maintaining a prudently tight monetary policy stance and improving foreign exchange market operations.
“Finally, additional efforts to protect the vulnerable from the impact of adjustment and reforms are warranted to foster an inclusive recovery”, it said.
The IMF, further noted that delays in securing key funding, particularly from donor programmes like the World Bank, could undermine the country’s efforts to stabilize its fiscal landscape.
Ghana’s economic reform programme, backed by the ECF, hinges on timely disbursement of funds and strict adherence to policy measures to address mounting debt vulnerabilities and improve economic resilience.
The IMF, urged the government to remain focused on its reform agenda, stressing that any deviations could reverse the progress achieved.
It called for strong collaboration between policymakers, Parliament and stakeholders to ensure the programme’s success, paving the way for sustainable growth and long-term economic stability.
“There have also been delays in the reforms needed to unlock access to budget and other types of support from key development partners, in part due to parliamentary gridlock. The political debate has been dominated by the December 7, 2024, general elections.
“Policy statements from leading presidential contenders highlight tackling debt risks, increasing employment, and addressing high costs of living as the main priorities, consistent with the objectives of the current ECF-supported programme”.
The Fund, cautioned that prolonged delays, could have serious repercussions on the country’s fiscal health, exacerbating liquidity challenges and undermining ongoing efforts to restore macroeconomic stability.
Timely disbursement of these funds, is essential to meet budgetary obligations, sustain key public services, and maintain confidence in Ghana’s economic recovery trajectory.
The warning comes as Ghana continues to implement reforms under its IMF-supported programme, aimed at addressing fiscal imbalances, reducing debt vulnerabilities, and promoting sustainable economic growth.
Any disruption to donor inflows risks derailing these efforts, further straining public finances and slowing progress toward economic stability.
“Against this backdrop, ensuring diligent program implementation before and after the upcoming elections is paramount and warrants strong commitment from all stakeholders. Government officials have on many occasions expressed publicly a strong commitment to fiscal prudence at this critical juncture.”
“However, the recurrent fiscal slippages during past electoral cycles and difficulties in monitoring fiscal developments in real time due to lags in data reporting underscore the risks. However, the contenders also promise vast spending programs, which will need to be carefully executed to ensure continued adherence to the program’s fiscal objectives”, parts of the report read.
The IMF, has urged all stakeholders to expedite the approval process to ensure Ghana remains on track to meet its economic targets and sustain critical development initiatives.
President-elect John Dramani Mahama, last week pledged to review and adjust Ghana’s existing agreements with development partners to align with the country’s current needs and aspirations.
Speaking during a courtesy call by the United Nations Resident Coordinator, Charles Abani, Mr Mahama, emphasised the importance of creating partnerships that reflected the realities of today and the vision of his incoming government.
Mr Mahama, noted the need for swift engagements with international institutions, particularly the IMF and the World Bank, to realign ongoing programmes with his government’s priorities.
“Looking at the existing programmes, we need to tweak them to meet the realities of today… One of our main concerns is the issue of debt repayments. We need to see how we can smooth them so that we don’t default again, which will be more catastrophic than the current defaulting,” he remarked.
Ghana is currently under a 36-month, $3 billion Extended Credit Facility with the IMF and has also signed several agreements with the World Bank, including a $250 million Ghana Financial Stability Project and another $250 million for the Ghana Energy Sector Recovery Programme. Mr Mahama stressed the urgency of managing debt repayments while working to stabilise the economy.
“I don’t kid myself that it is going to be an easy task; it is going to be quite tough. I anticipated that we were going to win, but I didn’t anticipate the margin by which we were going to win. That is an indication that Ghanaians have very high expectations,” he said, committing to working tirelessly to meet these demands.
