IMF backs Ghana’s recovery but warns against reform reversals

The International Monetary Fund has praised Ghana’s economic recovery programme, stating that it has achieved “substantial stabilisation gains” marked by falling inflation, stronger fiscal performance, improved foreign reserves, and renewed confidence in the Ghanaian cedi.

The assessment follows a visit to Accra by an IMF staff mission led by Ruben Atoyan from April 29 to May 15, 2026. The mission focused on Ghana’s 2026 Article IV consultation, the sixth and final review of the Extended Credit Facility (ECF), and discussions on a new non-financing Policy Coordination Instrument (PCI).

Stronger growth and fiscal performance

The IMF noted that Ghana’s economic growth in 2025 exceeded expectations, driven by broad-based economic activity and strong performance in gold exports, which reached historically high levels.

It also reported significant improvements in fiscal performance, stating that the primary surplus overperformed programme targets and that the public debt-to-GDP ratio declined sharply over the review period.

According to the Fund, most quantitative programme targets were met, although some structural reforms experienced delays in implementation.

Debt restructuring progress and improved market confidence

The IMF highlighted substantial progress in Ghana’s debt restructuring process, noting that bilateral agreements have been reached with about half of the country’s official creditors under the G20 Common Framework, with negotiations still ongoing with remaining partners.

It also pointed to Ghana’s successful return to domestic treasury bond issuance as a key signal of improving investor confidence and stabilising financial markets.

Cautious outlook amid global risks

Despite the positive assessment, the IMF warned that external risks remain elevated. It cited geopolitical tensions, particularly the war in the Middle East, as a potential threat that could increase global prices for energy, food, and fertiliser, with spillover effects on Ghana’s economy.

“The volatile external environment underscores the importance of preserving prudent policies and strengthening resilience,” the Fund said.

New Policy Coordination Instrument (PCI)

The IMF announced that it has reached a staff-level agreement with Ghana on a new 36-month Policy Coordination Instrument designed to sustain reforms after the current ECF programme concludes.

The PCI will focus on maintaining fiscal discipline, ensuring debt sustainability, improving governance, strengthening monetary and exchange rate policy, enhancing financial sector stability, and promoting economic diversification.

The Fund also noted that Ghana’s improved debt trajectory has created limited fiscal space for development spending, youth employment initiatives, and social protection—provided reforms are sustained.

It further indicated that a reduced primary surplus target of 0.5 percent of GDP from 2027 could remain consistent with debt sustainability if public financial management reforms are maintained.

Concerns over quasi-fiscal operations and BoG programme

The IMF raised concerns about the Bank of Ghana’s Domestic Gold Purchase Programme (DGPP), warning that losses associated with the initiative highlight risks posed by quasi-fiscal operations.

It urged authorities to ensure greater transparency and to incorporate any related costs into the national budget to strengthen accountability and safeguard the central bank’s balance sheet.

The Fund reiterated the need to limit activities that weaken the financial position of the Bank of Ghana.

Banking sector vulnerabilities remain

While welcoming progress in bank recapitalisation and the gradual withdrawal of regulatory relief measures introduced during the debt exchange programme, the IMF cautioned that risks remain in the financial sector.

It identified vulnerabilities in state-owned banks and specialised deposit-taking institutions, as well as high levels of non-performing loans that could constrain credit growth.

Energy and cocoa sector reforms urged

The IMF called for urgent reforms in key state-linked sectors, particularly energy and cocoa.

In the energy sector, it recommended reducing losses at the Electricity Company of Ghana, clearing legacy arrears, lowering generation costs, and finalising private sector participation in electricity distribution.

On cocoa, the Fund urged reforms at the Ghana Cocoa Board, including more frequent farmgate price adjustments and efficiency improvements to ensure long-term financial sustainability.

Governance and anti-corruption measures

The IMF also pressed for stronger anti-corruption reforms, including improved transparency in asset declarations and broader governance reforms to strengthen public accountability.

Warning against policy reversals

The Fund concluded by warning Ghana against repeating cycles of fiscal imbalances, rising debt, and reform reversals, stressing that sustained discipline will be essential to preserving recent gains.

It added that continued commitment to reforms will be critical to maintaining macroeconomic stability and protecting the progress achieved under the IMF-supported programme.