The Executive Board of the International Monetary Fund (IMF) has approved the fourth review of Ghana’s 36-month, $3 billion Extended Credit Facility (ECF), paving the way for an immediate disbursement of $367 million, bringing total disbursements under the program to approximately $2.3 billion.
The decision follows a mixed review of Ghana’s economic performance. While the country experienced stronger-than-expected growth in 2024, underpinned by robust activity in mining, agriculture, ICT, and construction, the IMF flagged significant fiscal slippages and delayed reforms in the final quarter of 2024, largely attributed to pre-election spending.
Despite the setbacks, the IMF praised the new administration’s swift and decisive response. Measures taken include the passage of a 2025 budget consistent with program goals, enhanced public financial management reforms, tightening of monetary policy by the Bank of Ghana (BoG), and an upward adjustment in electricity tariffs to reflect cost recovery efforts in the energy sector.
“Faced with large policy slippages and reform delays at end-2024, the new administration has taken bold corrective actions to maintain the program on track,” said Bo Li, IMF Deputy Managing Director. “Combined with ongoing reform efforts and an improved external position, the corrective measures are set to support Ghana in reaching the goals of economic stabilization, rebuilding resilience, and fostering higher and more inclusive growth.”
Fiscal Tightening and Reform
To address the fiscal deterioration, the government is aiming for a 1.5% of GDP primary fiscal surplus in 2025, driven by improved revenue mobilization and expenditure rationalization. Reforms include a comprehensive audit of payables, tighter budget controls, and a renewed focus on State-Owned Enterprise (SOE) efficiency, especially in the energy and cocoa sectors, which continue to pose significant fiscal risks.
The IMF stressed the importance of staying the course on fiscal consolidation, improving tax administration, and ring-fencing resources for social protection and development priorities.
External Sector and Debt Restructuring
The Fund commended Ghana’s external sector performance, highlighting strong export earnings especially from gold and increased remittance inflows, which have contributed to a faster-than-expected accumulation of international reserves.
On the debt front, the government has made notable progress. All parties have signed the Memorandum of Understanding (MoU) with Ghana’s Official Creditors Committee under the G20 Common Framework, and the focus now shifts to finalizing bilateral agreements. The IMF also noted Ghana’s continued engagement with commercial creditors toward a debt treatment consistent with program parameters.
Ghana’s improved performance and commitment to reforms have been recognized internationally, with major credit rating agencies upgrading the country’s rating in recent months.
Financial Sector and Banking Stability
The BoG has maintained a tight monetary stance to curb inflation, which although exceeded targets in 2024, has since begun to decline sharply. The Central Bank has also intensified supervision of undercapitalized banks, strengthened risk management practices, and promoted recapitalization.
The IMF urged authorities to finalize the restructuring of state-owned banks, implement contingency plans for weaker financial institutions, and address legacy challenges in the specialized deposit-taking sector.
Sustaining Momentum
While acknowledging the progress made, the IMF underscored that sustained reform momentum is critical to ensure lasting macroeconomic stability and inclusive growth.
“Looking ahead, staying the course of fiscal adjustment and completing the debt restructuring are key to ensure fiscal sustainability,” said Bo Li. “Forcefully addressing the challenges in the energy sector and ensuring efficient SOEs are critical to contain fiscal risks.”
The IMF concluded by encouraging Ghana to maintain an appropriate monetary policy, allow greater exchange rate flexibility, and continue building a foundation that enables private sector-led growth and job creation.
