By Toma Imirhe
As Ghana approaches the rescheduled conclusion of its three-year Extended Credit Facility (ECF) programme with the International Monetary Fund (IMF) on August 16, 2026, policymakers are shifting focus from stabilization to sustainability. For the Government of Ghana and the Bank of Ghana (BoG), the challenge is no longer just meeting programme benchmarks, but ensuring that the hard-won macroeconomic gains endure beyond IMF oversight.
The US$3 billion programme, approved in May 2023, was designed to restore macroeconomic stability following Ghana’s worst economic crisis in decades. With about US$2.8 billion already disbursed and the fifth review successfully completed, Ghana now stands at a critical inflection point of either exiting the programme with restored economic credibility or risking a reversal of the gains made through it..
By most official accounts, Ghana’s performance under the IMF programme has been strong. The IMF itself notes that “performance under the program has been generally satisfactory,” with all quantitative targets for the fifth review met.
Macroeconomic indicators have improved significantly. Growth has rebounded, reaching 6.0% last year, inflation has returned to single digits for the first time since 2021 – the 3.2% recorded for March is the lowest in decades – and the cedi has stabilized at below 11 to one US dollar amid rising reserves that can cover about 5.8 months of imports.. These gains reflect a combination of fiscal consolidation, tight monetary policy, and external support including debt restructuring agreements with bilateral creditors.
The Bank of Ghana has complemented fiscal tightening with cautious monetary easing, following a period of aggressive rate hikes. According to the IMF, the central bank has “appropriately begun a cautious monetary easing cycle,” (indeed lowering its benchmark Monetary Policy Rate by 1,400 basis points from 28% to 14% over the past year),while rebuilding international reserves.
How successful has the programme been?
Originally scheduled to end in May 2026, the programme was extended by three months to August 16. Contrary to speculation, the extension was not due to poor performance.
IMF Resident Representative Dr. Adrian Alter has emphasized that the extension was “purely technical” and intended to allow sufficient time to complete the final programme review.
Specifically, the extension enables an assessment of macroeconomic data through end-2025 and the first quarter of 2026, the completion of reforms underpinning the sixth and final review and the preparation and circulation of documentation formally ending the programme for IMF Board approval.
In essence, the additional time is designed to ensure a clean and credible exit rather than a rushed conclusion. It also allows for adjustments to programme targets particularly fiscal and monetary benchmarks to reflect evolving macroeconomic conditions while maintaining overall reform momentum.
The likelihood of Ghana meeting all end-programme targets is high but not guaranteed.
On the positive side, Ghana has demonstrated strong programme ownership. The IMF credits the government and its central bank with “decisively implementing ambitious corrective actions” following earlier policy slippages. Fiscal consolidation is on track, with a projected primary surplus of 1.5% of GDP by end-2026.
However, several risks could derail full compliance.
One is structural reform delays. While quantitative targets have largely been met, some structural reforms have experienced delays. These include public financial management improvements and state-owned enterprise (SOE) reforms. Failure to fully implement these reforms could affect the final review.
Another is lingering uncertainties over debt restructuring. Although significant progress has been made, Ghana’s external debt restructuring is not fully complete. The IMF has warned that delays in concluding agreements with all creditors could pose risks to programme completion and post-programme sustainability.
A third risk is external vulnerabilities. Ghana remains exposed to global commodity price volatility particularly gold and cocoa prices as well as oil import costs. A deterioration in external conditions could impact fiscal revenues and foreign exchange inflows. This has been illustrated vividly by the recent reversal of the surge in the price of gold and the sharp increase in the cost of oil imports resulting from the ongoing geo-political tensions in the Persian Gulf.
Inevitably, there are also policy slippage risks. Election-related spending pressures or weakened fiscal discipline could undermine programme targets. The IMF has repeatedly stressed the need to “stay the course” on fiscal adjustment.
Given these factors, Ghana is likely to meet most but possibly not all structural benchmarks, even if headline macroeconomic targets are achieved.
By conventional IMF metrics, Ghana’s programme can be considered broadly successful.
It has stabilized inflation and exchange rates, restored a measure of investor confidence, improved fiscal balances and rebuilt foreign exchange reserves. Perhaps most importantly, it has re-established macroeconomic credibility after the 2022 crisis and debt default.
However, success has come at a cost. Fiscal consolidation has constrained public spending, while high interest rates have weighed on private sector credit. The domestic debt exchange programme also imposed losses on bondholders, including institutional investors such as banks, insurers, fund managers and pension funds, affecting financial sector stability.
Moreover, Ghana remains classified as being at risk of debt distress, despite recent improvements in its sovereign credit ratings, underscoring the fragility of the recovery.
Preparing for life after the IMF
Both the Government of Ghana and the Bank of Ghana are already taking steps to ensure a smooth transition out of the programme.
One key priority is institutionalizing fiscal discipline. The 2026 budget aligns with IMF targets and introduces a strengthened fiscal responsibility framework. Sustaining primary surpluses will be critical to reducing debt levels.
Another is the strengthening of revenue mobilization. Efforts are underway to enhance tax administration, broaden the tax base, and reduce revenue leakages. These reforms are essential to maintaining fiscal space post-IMF.
Deepening monetary policy credibility is yet another priority. To this end, the Bank of Ghana is focusing on strengthening its independence, improving foreign exchange market operations, and reducing quasi-fiscal activities.
The central bank, in collaboration with government itself is also working towards fully restoring financial sector stability. Recapitalization of banks and resolution of non-performing loans remain ongoing priorities, alongside reforms to state-owned financial institutions.
Despite the progress made, Ghana faces significant challenges after exiting the IMF programme.
Maintaining a sustainable public debt trajectory without IMF oversight will require strict adherence to fiscal rules and continued engagement with creditors. It is noteworthy that government has already resumed issuing medium germ domestic bonds (which are available to foreign investors) even before the IMF programme ends.
The energy sector remains a major fiscal risk too, with arrears and inefficiencies threatening to derail consolidation efforts. This situation is not being helped by the ongoing spike in oil prices.
High interest rates and limited access to credit could hinder economic growth and job creation. Although interest rates have come down significantly since mid-2025, actual lending rates are still substantially higher than inflation and low yields on government treasuries have not yet diverted investible funds into the requisite major increase in credit to the private sector.
Perhaps most worrying of all, sustaining political commitment to difficult reforms—particularly in a potentially charged political environment—will be a major test, one that increases as the next general elections looms nearer.
While all these risks can be addressed, at least in part, by domestic economic policy, global economic uncertainty, commodity price swings, and geopolitical tensions which could quickly reverse gains, cannot.
Ultimately, Ghana’s exit from the IMF programme will be less about ticking the final boxes and more about maintaining discipline in a post-programme environment.
As IMF officials have cautioned, “continued reform efforts remain essential” to sustain stability and growth.
The three-month extension to August 2026 may appear minor, but it could prove decisive. By allowing time to consolidate reforms and complete the final review thoroughly, it enhances the credibility of Ghana’s exit.
The real test, however, begins after the IMF leaves. Whether Ghana can sustain its recovery independently will determine if this programme is remembered as a turning point—or merely a temporary reprieve.
SOURCE: Business Post online
