As Ghana makes steady progress under its current IMF-supported programme, an economist at the Institute of Economic Affairs (IEA) is concerned, not about today’s performance, but about what happens once the programme ends.
Speaking at the UPSA Law School–ABSA Quarterly Banking Roundtable, Dr. John Kwakye, Director of Research at the IEA, commended the government and the Bank of Ghana for showing greater fiscal and monetary discipline under IMF oversight.
However, he was quick to add that Ghana’s real test will come when the external pressure is gone.
According to Dr. Kwakye, who is also an adviser to the Governor of the BoG, Ghana has a history of maintaining both monetary and fiscal discipline under an IMF programme.
But unfortunately, once the programme ends, the economic managers often slip back into what he describes as “old bad ways” such as overspending, political excesses, and economic mismanagement.”
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“I expect that they will continue, but what I’m not so sure about is when the programme is over. You see, because Ghana has a history whereby when we are under an IMF programme, when they provide what we call an external anchor to the macroeconomic situation, then when we leave the program, we go back to our old bad ways and overspend and all that, especially during the election cycles. And that’s when we destabilise the economy. And then we have to run back to the IMF to impose discipline on us,” he bemoaned.
He cited that a key condition of Ghana’s ongoing IMF program is that the Bank of Ghana is barred from lending to the government, a long-standing practice that often fuels inflation, depletes reserves, and weakens the cedi.
This restriction, Dr. Kwakye noted, has helped ease pressure on monetary authorities and contributed to stabilizing inflation and the exchange rate. But he fears the discipline is externally imposed, not internally cultivated.
“We’ve been to the IMF 18 times, possibly more than any other country,” he said. “Each time, they act like a schoolmaster imposing discipline. But do we ever learn? That’s the question.”
Ghana is currently in the midst of a three-year IMF Extended Credit Facility programme, aimed at restoring macroeconomic stability, managing debt sustainably, and rebuilding reserves. So far, the programme has contributed to falling inflation, a more stable cedi, and stronger confidence in Ghana’s fiscal outlook.
But the benefits could be eroded quickly if discipline is abandoned after the programme ends, especially during the 2028 election cycle, when political spending pressures are likely to rise.
For Dr. Kwakye, if Ghana is to break free from the IMF dependency cycle, self-imposed fiscal and monetary discipline must become a national ethos, not a condition of external support.
“I hope that this will probably be the last of our programs, but it requires us to impose the discipline on ourselves and not require the IMF as a schoolmaster to come and do that,” he cautioned.
