IMF backs Ghana’s reforms to keep $3bn program on track

The International Monetary Fund (IMF) has commended President John Dramani Mahama’s government for taking bold and decisive corrective actions to keep Ghana’s Extended Credit Facility (ECF) program on course.

This follows the Executive Board’s completion of the fourth review under the USD3 billion ECF arrangement, a critical support mechanism designed to help Ghana stabilize its economy, rebuild macroeconomic buffers, and foster long‑term inclusive growth.

In a statement issued after the review, the IMF said Ghana’s corrective measures, combined with ongoing reforms and an improved external position, are expected to help the country achieve the program’s goals of economic stabilization, resilience building, and inclusive development.

“The authorities are strongly committed to restoring fiscal discipline and addressing the structural weaknesses that led to previous slippages,” the Fund noted.

According to the IMF, the government passed the 2025 national budget in line with the program’s objectives and enacted an enhanced fiscal responsibility framework aimed at correcting the imbalances that had threatened the program’s success.

Debt Sustainability Revenue Mobilization and Expenditure Control
The Fund emphasized that completing ongoing debt restructuring maintaining momentum on fiscal adjustment and enhancing domestic revenue mobilization remain central to achieving long‑term fiscal sustainability.

“This should be supported by continued efforts to streamline non priority expenditure while creating space for development priorities and social protection programs,” the IMF noted.

It also called for urgent improvements in tax administration stronger public expenditure controls and greater efficiency among state‑owned enterprises especially in the energy sector where arrears continue to pose significant fiscal risks.

Rebuilding Reserves and Taming Inflation
The IMF praised the Bank of Ghana for significant progress in rebuilding international reserves and implementing policies that are gradually reducing inflation which had spiked due to global shocks and domestic challenges.

“The Bank of Ghana should maintain an appropriately tight monetary stance until inflation returns to its target,” the Fund advised.

It also encouraged the central bank to scale back its intervention in the foreign exchange market and adopt a formal internal foreign exchange intervention policy to support greater exchange rate flexibility.

Strengthening the Financial Sector
On Ghana’s banking and financial sector the IMF acknowledged intensified efforts to address undercapitalized banks but noted that more work remains.

“Further strengthening of financial sector stability requires full implementation of the recapitalization plan for the National Investment Bank finalizing the reform strategy for state owned banks and developing contingency plans for banks that fail to recapitalize,” the Fund stressed.

It also urged the Bank of Ghana to step up crisis management efforts enhance financial sector safety nets and resolve legacy issues affecting specialized deposit taking institutions.

Looking Ahead
As Ghana enters a crucial phase in its ECF program the IMF stressed the need for continued political will and institutional discipline to carry out the reforms.

The Mahama administration’s actions were described as “bold and necessary” for resetting Ghana’s economic fundamentals and positioning the country for sustainable growth and macroeconomic stability. The next review under the program will assess progress on debt sustainability tax reforms and financial sector stability all critical to long‑term development and inclusive prosperity.