The International Monetary Fund (IMF) has revealed that the Mahama-led administration has pledged to reverse recent civil servant hires and halt unbudgeted projects initiated under the previous government, as part of its efforts to restore fiscal discipline.
In its 4th Review under the Economic Credit Facility Arrangement with Ghana, the IMF noted,
“The move, including enacting a 2025 Budget consistent with a 1.5% of GDP fiscal primary balance (end-March 2025) and enacting changes to the Public Financial Management and Public Procurement Acts to improve the fiscal responsibility framework, is to return the country to the path of fiscal consolidation.”
The Fund explained that the government’s medium-term measures will include drastically curtailing the scope of payables and commitments based on a comprehensive audit, updating the centralized inventory of all ongoing and planned projects, and strengthening public investment management in line with recommendations from the recent IMF Public Investment Management Assessment (PIMA) mission.
According to the IMF, the new administration is committed to achieving its fiscal targets under the IMF-supported programme while implementing its policy priorities.
“They intend to reach and maintain over the next few years primary surpluses of 1½% of GDP and raise domestic revenue significantly,” it reported.
The IMF indicated that these steps, coupled with ongoing debt restructuring, will “underpin Ghana’s return to a moderate risk of debt distress by 2028.”
Ripple Effects on Civil Servants and the Economy
Reversing recent civil service hires may result in job losses or stalled onboarding processes for hundreds of workers, potentially dampening household incomes and consumption in the short term. Analysts, however, note that such tough decisions could restore investor confidence, reduce the wage bill burden, and create fiscal space for targeted spending in productive sectors.
The IMF maintains that with stronger domestic revenue mobilisation, disciplined expenditure management, and a clearer public investment strategy, Ghana’s economy will be better positioned to achieve debt sustainability and inclusive growth in the medium term.
