News Guide Africa

Tag: International Monetary Fund (IMF)

  • Stakeholders clash amid call for review of Gold For Reserves policy

    Stakeholders clash amid call for review of Gold For Reserves policy

    By Adnan Adams Mohammed

    The immediate past Finance Minister, Dr. Mohammed Amin Adam, has questioned the sincerity of the Bank of Ghana’s data provided to the International Monetary Fund (IMF), particularly regarding a reported GH¢3.8 billion loss in 2024 under the Gold for Reserves programme.

    Dr. Adam highlighted the absence of documentation for this loss at a parliamentary hearing and its non-inclusion in the bank’s published financial statements or reports to the IMF, raising concerns about potential misreporting.

    As tensions rise, Bank of Ghana Governor, Dr. Johnson Asiama, has called for a review of the programme, urging the Finance Ministry to consider alternative financing structures to ease the central bank’s financial burden. The programme’s sustainability hangs in the balance as stakeholders demand accountability and transparency.

    The IMF has insisted it stands by its assessment of a US$214 million loss through the Bank of Ghana’s Gold for Reserves programme by September 2025, clarifying that its report aimed to highlight operational and financial risks rather than classify the program as loss-making.

    The Bank of Ghana however, describes the IMF’s assessment as speculative, since it is citing unaudited figures.

    The IMF’s Country Representative for Ghana, Dr Adrian Alter, disclosed this during a conversation on PM Express Business Edition, last week.

    Dr Alter explained that the assessment contained in the staff report was not intended to classify the Domestic Gold Purchase Programme as a loss-making operation, but rather to highlight the operational and financial risks, particularly in relation to Goldbod dealings.

    The country representative noted that “we understand that the numbers are still being audited as we speak, and there is the likelihood that numbers could go down marginally or go up.”

    Dr Alter acknowledged that the Bank of Ghana had described the IMF’s assessment as speculative because audited figures are still being prepared.

    He stressed that the Fund stands by its assessment, which was meant to highlight expected challenges and not to cast doubt on the programme.

    Apparently, the Bank of Ghana, in a statement issued on December 25, 2025, maintained that figures reported in relation to losses from gold operations in 2025 should be described as speculative.

    The Bank argued that since its audited financial statements for its 2025 performance, including all relevant disclosures, will be published in 2026 in accordance with statutory requirements, it would not be right to give credence to these reports.

    The Bank of Ghana further noted that although the IMF review flagged financial risks associated with the Domestic Gold Purchase Programme, these concerns should be viewed within the broader context of the programme’s significant macroeconomic contribution.

    It stated that the Domestic Gold Purchase Programme has helped to boost Ghana’s international reserves, support currency stability, and enable access to large volumes of foreign exchange without incurring new debt.

    “The operational role of GOLDBOD as an aggregator has been important in channelling gold-based inflows from the small-scale mining sector into the official market,” the document from the Bank of Ghana stated.

    Consequently, Dr Asiama, has called for a review of the Gold-for-Reserves programme, urging the Minister for Finance, Dr Cassiel Ato Forson, to consider a more sustainable financing structure for the Ghana Gold Board’s (GoldBod) trading operations.

    He said such a rethink is necessary to ease the financial burden currently borne by the central bank.

    Dr Asiama made the appeal while responding to questions at a sitting of Parliament’s Public Accounts Committee, where concerns were raised about losses incurred by the Bank of Ghana in supporting GoldBod’s gold purchasing activities.

    He explained that the programme plays a key role in building Ghana’s foreign reserves and therefore requires stronger backing from the Ministry of Finance.

    “It’s not a question of shutting it down, but enhancing its efficiency by looking at the inefficiencies and taking them out,” he said.

    According to the BoG Governor, a critical issue is whether the costs associated with the programme should continue to be absorbed by the central bank.

    “The best thing now, in the national interest, is to look again at the trading model and decide whether the Ministry of Finance should make a budgetary allocation to take care of the costs, given that this is supporting our reserves build-up,” Dr Asiama stated.

    He added that these are policy questions that require consensus at the national level.

    Dr Asiama noted that the Bank of Ghana has already taken steps to address some inefficiencies within the programme and stressed the need for a coordinated approach to ensure its long-term success.

    “In the case of the Gold-for-Reserves, as the name suggests, the objective was to help us build reserves, and the evidence is clear,” he said, pointing to improvements made so far.

    “Going forward, let’s look at the aspects we can fix in the interest of the country. It calls for a unified approach.”

    The BoG has come under intense scrutiny following revelations by the International Monetary Fund in its fifth review of Ghana’s ongoing IMF programme that losses from artisanal and small-scale gold transactions under the scheme had reached US$214 million by the end of September 2025.

    While GoldBod itself has reportedly recorded profits, the IMF noted that the central bank absorbed most of the losses arising from the programme.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • Mahama confident in 2026 expansion as IMF cautions on bond market return

    Mahama confident in 2026 expansion as IMF cautions on bond market return

    As the International Monetary Fund (IMF) urges caution regarding Ghana’s return to the international bond market, President John Dramani Mahama is exuding confidence in the nation’s economic trajectory, outlining an ambitious roadmap for accelerated growth and expansion throughout 2026.

    The divergence in tone highlights a delicate balance between leveraging recent economic stability, bolstered by strong domestic investor sentiment and a rallying cedi, and heeding international advice to manage future fiscal risks carefully.

    The IMF’s Measured Warning

    Ghana’s government has signaled its intention to resume the issuance of treasury bonds in early 2026, a strategic move aimed at lengthening the average maturity of its debt and easing rollover risks following the 2023 domestic debt restructuring.

    However, the IMF, in recent advice to the government, has counselled a gradual and cautious approach. The international body points to a narrowing spread between bond yields and the central bank’s monetary policy rate. Furthermore, while the secondary bond market advanced strongly last week, the primary market for government paper has seen a receded appetite in recent auctions, a factor the IMF believes warrants prudence.

    Since the debt restructuring, treasury bills have been the primary source of budget financing. The IMF’s advice underscores a need to ensure sustainable market appetite before fully committing to larger bond issuances.

    Investor Confidence Remains High in T-Bills

    Despite the caution surrounding the long-term bond market, investor sentiment in short-term instruments remains robust. Data from the Bank of Ghana for the week of December 29, 2025, shows that Treasury bills were oversubscribed by 18.48%.

    Investors submitted total bids of GH¢3.91 billion, exceeding the Treasury’s target of GH¢3.30 billion. This strong demand, particularly for the 91-day bill, reflects a rebound in bank participation and suggests a high degree of confidence in the government’s short-term fiscal management. Interest rates edged up slightly across all maturities, indicating sustained market appetite.

    President Mahama Charts a Confident 2026 Roadmap

    In his New Year Message to the Nation on January 1, 2026, President Mahama focused squarely on expansion and delivery, signaling that the government is confident enough in its 2025 gains to accelerate reforms.

    The President outlined a broad agenda aimed at transforming key sectors:

    Social Services: Operationalizing Universal Health Coverage through the Free Primary Health Care Programme and continuing the digitalisation of schools.

    Agriculture and Energy: Transforming farming into a commercially viable sector and working towards a 30% share of renewable energy in the national mix to reduce costs.

    Governance: Intensifying the fight against corruption with “no sacred cows” and implementing recommendations of the Constitutional Review Committee.

    “The gains made in 2025 provide a foundation for building the Ghana that citizens desire,” the President stated, projecting a sense of certainty and control over the nation’s economic future that appears to contrast with the IMF’s more measured risk assessment.

    As Ghana navigates its recovery, the government faces the challenge of balancing its ambitious growth agenda and confidence in its own policies with the cautious, risk-averse guidance of its international partners.

     

    By Adnan Adams Mohammed

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • IMF urges caution as BoG eyes further rate cuts

    IMF urges caution as BoG eyes further rate cuts

    The International Monetary Fund (IMF) has admonished the Bank of Ghana (BoG) to tread carefully on further easing of the policy rate, emphasizing the need for a data-driven approach.

    “With inflation pressures subsiding and the recent appreciation of the Cedi, the Bank of Ghana has appropriately begun a cautious monetary easing cycle. Any further easing should remain gradual and data-dependent,” the IMF said in its Staff Review of Ghana’s Bailout Programme.

    Since January 2025, the BoG has cut the policy rate by 9 percentage points to 18%, aiming to spur economic growth. BoG Governor Dr. Johnson Asiama remains committed to pushing lending rates down to 10% by the end of his tenure, believing it’s crucial for unlocking private-sector growth.

    “We are doing everything we can to make sure we achieve it,” Dr. Asiama said, noting that average lending rates have fallen from 32% to 21% within the year. The Ghana Reference Rate (GRR) has also dropped from 29.72% in January to 17.86% in October 2025, signalling improved liquidity.

    However, the IMF warns that further easing should be gradual, citing the need to balance promoting economic growth with curbing inflation pressures.

    “Lower rates mean stronger businesses, more jobs, and faster economic growth,” Dr. Asiama said, emphasizing the importance of reducing credit costs for Ghana’s economic recovery.

    Addressing journalists after the 127th Monetary Policy Committee (MPC) meeting, Dr. Asiama acknowledged that the cost of borrowing remains high, but recent data shows “undeniable progress” with average lending rates falling sharply from about 32 percent to 21 percent within the year.

    “I’ve said before that I want to see average lending rates at 10% by the end of my tenure and I still stand by that. We are doing everything we can to make sure we achieve it,” he said.

    Describing the current average lending rate of 21–22 percent as progress, he however noted that more needs to be done to bring it lower for an economy seeking faster private-sector growth.

    “It may not be exactly what we intended by this time, but a lot of progress has been made,” he noted.

    He added that as Treasury bill yields continue to fall, commercial banks will be forced to lend more aggressively, paving the way for even sharper declines in lending rates.

    Latest figures from the Bank of Ghana’s November 2025 Summary of Economic and Financial Data confirm that the average lending rate dropped to 22.22 percent in October, down from 30.07 percent in January — a decline of more than 7 percentage points.

    The month-by-month data underscores the steady improvement:

    • 30.12% in February

    • 29.18% in March

    • 27.40% in April

    • 26.90% in May

    • Slight rise to 27.00% in June

    • Continuous declines afterward

    Despite the broad decline, the Governor noted stark variations in the cost of credit. While some banks price loans around the GRR, others charge as high as 39 percent, depending on borrower risk profiles.

    Meanwhile, in collaboration with the Fund, BoG has developed and implemented a new structured foreign exchange operations framework to intermediate FX flows and smooth excessive market volatility, while accumulating international reserves.

    The Fund said “The authorities have taken decisive steps to safeguard financial stability, including by implementing the strategy to restructure and reform state-owned banks, closing gaps in the crisis management and resolution framework, and pursuing a multi-pronged approach to reduce non-performing loans”.

    The Bretton Woods institution further pointed out that the authorities have taken decisive steps to safeguard financial stability, including by implementing the strategy to restructure and reform state-owned banks, closing gaps in the crisis management and resolution framework, and pursuing a multi-pronged approach to reduce non-performing loans.

    It added that important progress has been made to strengthen Ghana’s governance and public sector efficiency in line with the recently published Governance Diagnostic Assessment report, highlighting, that efforts to improve transparency and oversight need to continue, particularly related to public disclosure requirements and management of State-Owned Enterprises in the gold, cocoa, and energy sectors.

    It stressed that ambitious structural reforms to help create an environment more conducive to private sector investment, and to enhance governance and transparency remain key to boosting the economy’s potential and underpinning sustainable job creation.

     

    By Adnan Adams Mohammed

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • IMF goes hard on Ghana’s economic managers  …as it pins corruption as major barrier to effective economic governance

    IMF goes hard on Ghana’s economic managers  …as it pins corruption as major barrier to effective economic governance

    The International Monetary Fund (IMF) has expressed worry about the widespread corruption in the country, which it says remains a major barrier to effective economic governance, public trust and sustainable growth in Ghana.

     

    According to the Fund as captured in the Ghana Governance Diagnostic Report, public procurement processes are a major source of corruption risk, characterised by excessive reliance on sole-source and restricted tendering without adequate justification or oversight, resulting in inefficiencies, inflated costs, and frequent contract non-performance.

     

    “While Ghana has been a beacon of political stability in the region, corruption remains a major barrier to effective economic governance, public trust and sustainable growth in Ghana”.

     

    It stated that the accumulation of large expenditure arrears, driven by weak budget credibility and poor commitment controls, exacerbates governance vulnerabilities by creating discretionary opportunities for corrupt practices in payment prioritization.

     

    “Anti-corruption institutions remain fragmented and under-resourced, while preventive mechanisms such as asset declarations, conflict-of-interest rules, and beneficial ownership registries are incomplete or poorly enforced”, it added.

     

    Furthermore, the Fund said revenue administration is weakened by outdated legal provisions, political influence, outdated systems, and limited digitalization, undermining the effectiveness of the Ghana Revenue Authority. “The judiciary, while constitutionally independent, faces delays, resource constraints, and has had to deal with allegations of corruption, while land tenure complexities continue to erode property rights”.

     

    It continued that financial sector oversight has advanced, but supervisory capacity and governance challenges in banks persist, highlighting that “Overall, important inefficiencies and overlapping mandates create space for corruption, underscoring the need for comprehensive and well-sequenced reforms”.

     

    “The government has committed to strengthening governance and reducing corruption, providing a critical opportunity to address these long-standing vulnerabilities. Lasting improvements in governance and corruption control will require sustained commitment”, it added.

     

    Recommendations

     

    The report emphasised that addressing Ghana’s governance weaknesses will require well-sequence, comprehensive reforms to strengthen institutional independence, transparency, and operational capacity.

     

    It stressed the importance of reinforcing preventive and enforcement mechanisms, enhancing the financial and operational autonomy of anti-corruption agencies, bolstering fiscal credibility and accountability (including by prioritizing budget credibility, implementing the arrears clearance strategy, entrenching competitive procurement practices), and generally minimizing discretionary powers in public sector operations.

     

    Additionally, sustained progress will also depend on reducing reported inefficiencies in justice, land administration, and revenue administration.

  • Ghana’s Top Academics Speak Out Against Over-Reliance on Bretton Woods Institutions

    Ghana’s Top Academics Speak Out Against Over-Reliance on Bretton Woods Institutions

    Two prominent Ghanaian academics, Emeritus Professor Ernest Aryeetey and Professor Aaron Mike Oquaye, have raised concerns about the country’s over-reliance on Bretton Woods institutions, specifically the International Monetary Fund (IMF) and the World Bank, for policy direction, criticizing successive governments for failing to take ownership of Ghana’s economic reform agenda, and instead relying on external consultants to shape the country’s development strategy.

    Professor Aryeetey argues that these consultants often bring perspectives based on their own experiences, which may not fit Ghana’s unique context, and that the country has not invested enough in developing its own technical capacity to design and execute economic transformation policies.

    “In a way, when we went to the Washington Group to seek support for what we were doing, we didn’t always go to them with a clear plan of what we wanted,” the former Vice Chancellor of the University of Ghana said. “We often went to say something like we want to do something about agriculture, and they would say okay fine, we’ll send you some experts to come and help you.”

    Prof. Aryeetey explained that such experts, often from different countries, naturally bring perspectives based on their own experiences — which may not fit Ghana’s unique context. This, he said, is partly because the country has not invested enough in developing its own technical capacity to design and execute economic transformation policies.

    “These experts are coming from different countries; they are going to sell to you what they do in their own countries, and this is because we have not invested enough in the capacity of people who could tell the government how to transform our sectors,” he said.

    He stressed that for Ghana to make meaningful economic progress, it must build and rely on local expertise capable of defining and driving its own development vision.

    “You don’t let a World Bank consultant come and tell you what you need to do,” he noted. “You should be telling him or her, this is what I want to do — can you help me structure it, not ask him what should I do.”

    Prof. Aryeetey’s remarks reignite debate on the effectiveness of Ghana’s long-standing engagement with multilateral lenders and the broader question of whether externally driven economic prescriptions have truly served the country’s long-term development needs.

    Meanwhile, Prof. Oquaye asserts that IMF programs have imposed restrictive policies that weaken innovation and limit the government’s fiscal flexibility, failing to bring sustainable growth.

    Call for Homegrown Solutions

    Both professors emphasize the need for Ghana to build and rely on local expertise capable of defining and driving its own development vision.

    Prof. Oquaye suggests that Ghana should focus on effective use of its abundant natural resources, such as gold, oil, and diamond, to drive economic growth.

    They argue that Ghana should rethink its approach to economic management and seek homegrown solutions rather than relying on external institutions.

    Current Situation

    Ghana is currently implementing its 17th IMF-supported program, a US$3 billion Extended Credit Facility (ECF) aimed at restoring macroeconomic stability and ensuring debt sustainability.

    Some analysts have raised doubts about the government’s ability to exit the program within the scheduled timeframe of May 2026

     

     

  • FX market works in reaction to prevailing conditions … BoG dismisses charges of manipulation

    FX market works in reaction to prevailing conditions … BoG dismisses charges of manipulation

    Bank of Ghana has denied allegations that it has manipulated the foreign exchange market, noting that, currently that market is controlled by commercial banks.

    It notes the Central bank only intervenes for general economic stability purposes, stressing that its actions fall squarely within a flexible exchange rate framework aimed only at curbing excessive volatility.

    The Governor of the Bank of Ghana, speaking at the IMF–World Bank Governor Talk Series in Washington, D.C., explained that while the Bank occasionally intervenes to stabilise the cedi, such actions are reserved for periods of exceptional market pressure.

    “The framework that we have is a flexible exchange rate management framework. Essentially, what we do is smoothen excessive volatilities,” Dr. Johnson Asiama explained.

    Addressing concerns about the scale of intervention, he said: “Yes, there were allegations about whether we were intervening in the market, but that was not exactly the case,” noting that significant foreign outflows had required short-term support from the central bank.

    According to Dr. Asiama, between the second and third quarters of 2025, Ghana undertook several “lumpy” foreign payments, including billions of U.S. dollars to Independent Power Producers (IPPs) and domestic bondholders who exited their holdings amid the cedi’s appreciation.

    At the same time, remittance inflows weakened, draining liquidity from the interbank foreign exchange market.

    “In the mix of that, the central bank had to step in. The interbank FX market had dried up, so the central bank had to provide that support,” he said.

    Dr. Asiama added that market conditions have since improved, thanks to directives requiring mining firms to channel all foreign exchange inflows through commercial banks — a measure that is already showing positive results.

    “We do not over-support the market at all. What we seek to do is limit volatility to ensure smooth dynamics in the market, and that is the framework we will maintain going forward,” he affirmed.

    Dr Asiama further noted that recent pressures on the foreign exchange market were triggered by large energy sector payments and investor exits, not by direct market intervention from the Central Bank. He emphasized that the Bank had to undertake a series of “lumpy” foreign exchange payments between July and August to clear long-standing energy debts and other domestic obligations.

    “Yes, there were allegations about whether we were intervening in the market. But that was not exactly the case,” he explained.

    The Governor’s remarks come amid renewed public scrutiny of the Bank of Ghana’s foreign exchange management practices and growing interest in the country’s energy sector debt, which continues to weigh heavily on fiscal stability.

    “Between the second and third quarter, we had to do a number of lumpy payments. There were all these large arrears in payments to some of the IPPs. These were billions of US dollars.”

    He revealed that the Central Bank also faced additional outflows from some domestic bondholders who decided to liquidate their investments after the cedi appreciated.

    “We also had some of the domestic debt-affected bondholders who wanted to exit. They felt that because the currency had appreciated, it was the right time to take up their investment. We had to allow them to go,” he said.

    The Bank of Ghana Governor said those combined pressures temporarily tightened liquidity in the foreign exchange market.

    “We did a lot of lumpy payments between July and August, and you might have seen some of that,” he noted.

    Dr. Asiama also disclosed that the situation coincided with a decline in remittance inflows, which typically provide over US$6 billion in annual forex injections.

    “Because all these inflows accrue to the central bank, and it was happening at a time when we saw some decline in remittance inflows, the central bank needed to step in to meet all those lumpy payments,” he said.

    According to him, the interbank foreign exchange market “had dried up” during that period, forcing the Bank of Ghana to provide temporary support.

    “The central bank needed to provide that support. But I’m happy to say that the interbank FX market has come back,” DrAsiama said.

    He explained that the central bank has since written to mining firms to route their inflows through commercial banks to improve liquidity in the FX market.

    “We are beginning to see some pick-up in interbank FX market activity,” he said, clarifying that the directive covers all commodities except gold.

    The Governor stressed that with improved market conditions, the central bank no longer needs to be heavily involved in supplying dollars.

    “As of yesterday, we had committed to make available US$150 million. This morning, when I checked, the market had picked up only US$90 million, so US$60 million automatically goes into our reserves,” he said.

    “Same thing Tuesday — we made available US$150 million, and the markets picked up less than half that. So automatically, it goes into our reserves.”

    He dismissed claims that the Bank was over-supporting the market.

    “We do not over-support the markets at all. All we seek to do is to limit volatility and ensure smooth market dynamics. That’s the framework we will maintain going forward,” Dr Asiama emphasized.

     

    By Adnan Adams Mohammed

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • IMF staff mission visits Ghana Sept 29 for 5th programme review

    IMF staff mission visits Ghana Sept 29 for 5th programme review

    An International Monetary Fund (IMF) staff mission is scheduled to arrive in Accra on September 29, 2025, for Ghana’s fifth programme review under the US$3 billion Extended Credit Facility (ECF).Ghana Sports Merchandise

    The review, which follows the completion of the fourth assessment earlier this year, will evaluate Ghana’s progress on key fiscal and macroeconomic targets.

    It is also expected to determine whether the country qualifies for the next disbursement of about US$360 million in October.

    To date, Ghana has received approximately US$2.3 billion since signing onto the programme in May 2023.

    The fifth review carries added weight as it is the penultimate assessment before the programme concludes in May 2026.

    The upcoming IMF mission will assess Ghana’s economic data up to June 2025, with discussions expected to focus on key areas of concern.Ghana Sports Merchandise

    These include inflation trends and the effectiveness of policy measures, the sustainability of reserve accumulation, and fiscal discipline particularly progress toward achieving the 1.5% of GDP primary surplus target.

    The review will also examine the build-up of arrears in statutory funds such as the National Health Insurance Levy (NHIL), GETFund and the Road Fund, as well as the recapitalisation needs of weak private banks and state-owned institutions, including the National Investment Bank (NIB).

    In addition, gaps in social spending and protection programmes are likely to feature prominently, as the IMF evaluates Ghana’s ability to balance fiscal adjustment with safeguarding vulnerable groups.

    Ghana risks facing fiscal pressures once IMF oversight ends, raising concerns about post-programme discipline.Ghana Sports Merchandise

    Development partners have urged the government to put in place “shock absorbers” to prevent economic slippages, but authorities insist that reforms and expenditure controls are already in place to reassure markets.

    The IMF approved the SDR 2.242 billion (about US$3 billion) arrangement for Ghana in May 2023 to restore debt sustainability, rebuild reserves, and support structural reforms.

    The programme’s key priorities include strengthening revenue mobilisation, improving public financial management, curbing inflation, preserving financial stability, and creating conditions for private-sector-led growth.

    With one final review scheduled for April 2026, the upcoming assessment will serve as a critical test of Ghana’s ability to maintain reforms and sustain market confidence as the country prepares to exit IMF support.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

  • IMF projects Ghana’s debt-to-GDP ratio to fall to 60% by end of 2025

    IMF projects Ghana’s debt-to-GDP ratio to fall to 60% by end of 2025

    The International Monetary Fund (IMF) has projected Ghana’s public debt to settle at around 60 percent of Gross Domestic Product (GDP) by the close of 2025, citing the country’s recent debt restructuring programme as the main driver behind the significant decline in debt levels.

    Speaking at a press briefing in Washington, D.C., on Thursday, September 11, 2025, the IMF’s Director of Communications, Julie Kozack, explained that the restructuring has materially eased Ghana’s debt burden.

    She noted: “The recent debt restructuring agreement has significantly improved debt service indicators for Ghana.”

    According to Mrs. Kozack, the improved debt outlook provides room for economic rebound and critical investment inflows.

    “This drop can be described as a specifically steep reduction in Ghana’s public debt,” she added, describing it as a meaningful step toward restoring fiscal sustainability.

    Looking ahead, the IMF stressed that sustaining these gains will require continued reforms. Mrs. Kozack underscored the need to “boost domestic revenue, strengthen public financial management, and overall maintain fiscal discipline.”

    Figures from the Bank of Ghana confirm the trend. As of June 2025, Ghana’s total debt stock stood at GH¢613 billion, representing 43.8 percent of GDP.

    She further noted that the new administration has taken bold measures including enacting a strong budget, tightening monetary policy, implementing public financial management reforms, and adjusting electricity tariffs while continuing to make progress with debt restructuring efforts.

     

  • IMF, economists back utility tariffs hike amid public outcry

    IMF, economists back utility tariffs hike amid public outcry

    As Ghanaians are up in arms against proposals by the utility companies for steep upwards tariff adjustments, some stakeholders of the Ghanaian economy are all out for the hikes, although not being specific with the rate.

    The International Monetary Fund has described the proposal as vital to fixing inefficiencies and attracting investment into the country’s electricity sector.

    At a media event in Washington, D.C., last week, the IMF’s Director of Communications, Julie Kozack, said the Fund’s backing is linked to the broader goal of restoring financial stability in the energy sector.

    “What is essential from our perspective is that any tariff adjustments in the electricity sector aim to address longstanding inefficiencies in the sector, importantly, that they support much-needed investment in the electricity sector, and also that they are aimed at preventing the accumulation of arrears in the energy sector,” she explained, adding that, the IMF’s support goes beyond tariff reviews.

    “More generally we are continuing to support broader sector reforms including private sector participation in ECG operations,” she noted.

    According to her, these reforms are part of ongoing efforts to improve the performance of state-owned enterprises and reduce fiscal risks.

    The Public Utilities Regulatory Commission (PURC) is considering new tariff adjustments, expected to take effect from October 1, 2025. Currently, the Commission is engaging stakeholders on proposals submitted by utility providers, including the Electricity Company of Ghana (ECG), which has requested for about 225% increase in tariffs.

    ECG has requested a hike in its Distribution Service Charge (DSC1) from the current GHp19.0875/kWh to an average of GHp61.8028/kWh, citing inflation, foreign exchange volatility, interest rates, and the need to recover investment costs as drivers for the proposed adjustment. Also, Ghana Water Company Limited (GWCL) has requested for a 281% increase in its water tariff, proposing a jump from GH¢5.28 per cubic metre to GH¢20.09 per cubic metre

    The proposed electricity tariff review is intended to help restructure the energy sector’s growing debt burden and strengthen the long-term sustainability of electricity supply.

    The proposal has drawn criticism from consumers, who argue that the increases are disproportionate to the quality of service delivered.

    Meanwhile, a Board Member of PURC and Presidential Staffer, Nana Yaa Jantuah, has assured Ghanaians that it will safeguard consumer interests as utility providers push for substantial tariff increases.

    “The cost of energy is expensive, so we need to keep the lights on. We must ensure that energy is available for industry, for the economy to run, and to guarantee consumer comfort.

    “The quality of service is key, but we also have a very difficult job—to ensure improved service delivery while keeping the utilities financially viable. Ultimately, we must find a win-win situation,” she said.

    However, Energy Analyst, Kwesi Yamoah Abaidoo, has strongly criticised the proposals, arguing that ECG has failed to tackle inefficiencies such as technical and commercial losses, poor governance, and wastage, which he said continue to drain the company’s resources.

    “Requesting such an increment will yield no results until these inefficiencies are addressed. ECG seems to take pleasure in increasing the burden of Ghanaians instead of fixing its structural problems,” he said.

    While acknowledging recent improvements in power stability, the analyst insisted that repeated tariff hikes were unfair to ordinary citizens. He recalled that the Public Utilities Regulatory Commission (PURC) only approved a 14.75 per cent tariff increase in July, yet consumers are now being asked to brace for another sharp adjustment.

    Mr Abaidoo also noted that gains from recent currency appreciation, which should have cushioned consumers through reduced tariffs, were not passed on.

    “The average Ghanaian hasn’t seen any increase in disposable income. Salaries remain stagnant, yet electricity costs keep rising. This proposal risks pushing low-income households, especially those in rural areas, off the national grid,” he warned.

    He further cautioned that such steep hikes would also hurt businesses, forcing them to pass costs onto consumers, thereby worsening economic hardships.

    An Energy Economist, Ebenezer Baiden, has explained why the ECG is requesting a 225% tariff increase, arguing that its current 11% share of tariffs is far too low to sustain operations.

    Mr Baiden, in a radio interview said the request falls under the multi-year tariff review cycle.

    “So we normally go through minor adjustments, which we call automatic adjustments. There are parameters to consider. So, for example, it looks at some macroeconomic adjustment variables and then also it looks at variation in dispatch and then the varied fuel used,” he explained.

    He added that Ghana is currently at the stage of a major review.

    “Now we are looking at a multi-year order, which is a major tariff review. Normally, it takes five years for that to happen. So, we have been working through this from 2022 to 2025, and the multi-year order ends.

    “Then 2026 to 2030, another multi-year order begins. Now this looks at structural issues, works that may have happened within the period, how we finance them, and then how to recover those costs.”

    Mr Baiden said that ECG has had to pre-finance projects before seeking tariff adjustments, leaving the company heavily indebted.

    “Currently, the ECG tariff structure is such that, or the PURC tariff structure is such that, you have to pre-finance projects, bring them into service before you can now ask for a tariff adjustment. They should visibly see that whatever you invested in is working, and customers are benefiting from it, before you can apply for that.

    “So we’ve gone through some facilities, supplier credits, taking loans from banks and all that. Today, our books are all in the red. And it is to say that all those works that we committed to across the ECG operational areas, commencing from Techiman to down south, which control over 75% of electricity consumption in Ghana, we’ve been able to expand networks. We’ve been able to do network intensifications where we have low voltages. We’ve injected transformers and all that. Today, generally, the supply quality is better than before.”

    He said it was now necessary for ECG to recover the investments made.

    “Now it’s time we’ve gone to the PURC to say that these are the costs that we have incurred, let’s sit and discuss. But what we have incurred in our books, we need to now pay for it, empower us to now be able to go back and do more.

    “About digitalisation, today you sit in your room and you can now buy credit. You can pay your bills. You can report a fault, and technical men are on their way to your place. You don’t need to come to the district office to queue for electricity.

    “These are some of the interventions that have been done to improve supply services, and based on that, the cost we have incurred with the PURC, it’s time to communicate that to seek customer support and then get that as part of the electricity (tariffs). So this is why we have a proposal before the PURC, and we are asking for a stretch adjustment.”

    Breaking down the numbers, Mr Baiden revealed that ECG currently retains only 11% of total electricity revenue, with about 65–70% going to generation and another portion to the transmission company GRIDCo.

    “Currently, our tariff is 19%. In fact, it dropped in the last quarter review to 17%. Customers are paying 17 pesewas, the total is about 1 cedi 59 pesewas. A bigger chunk of it, about 65 to 70% goes to generation, then transmission, which is GRIDCo, will take a portion of it. Now ECG’s portion is 11% and it is the ECG portion that we are talking about that has to be rebased.

    “Standard utility operation, we have it between 30 to 35%. We are working with 11%. You collect the revenue and you pay all out.”

    Using an illustration, he explained the company’s challenge:

    “If it costs 10 cedis to purchase power from the power producer, and then let’s say GRIDCo adds 1 cedi to it, let’s say ECG adds 2 cedis to it, we have a build-up, total build-up of 13 cedis. And your cost or my price to the customer should be around 13 cedis. Today our number is somewhere around 8 cedis.

    “So what this means is that if, by even looking at paying for power producers only, we go into the red, this is a challenge for us. So that’s how come we are talking about that number, the 61 pesewas,” he explained.

     

    By Adnan Adams Mohammed

  • IMF backs BoG’s forex enforcement measures

    IMF backs BoG’s forex enforcement measures

    As part of measures to control foreign currency exchange market, commercial banks have started enforcing a new directive from the Bank of Ghana on foreign currency withdrawals.

    The directive is coming from the Revised Charges and Reporting Requirements on Foreign Currency Cash Transactions directive from the Bank of Ghana.

    A text message sent from some of the commercial banks on 11 September 2025 informed their clients that “in line with BoG guidelines, there is a 5% withdrawal fee effective immediately”.

    It added that this is on foreign accounts funded by transfer or cheque deposits while foreign accounts funded with cash deposits are exempted.

    A letter from the Bank of Ghana to the commercial banks dated August 27, 2025, however, stated the following updates regarding foreign currency accounts effective 25 August 2025:

    A charge of 5% shall be applied to all foreign currency cash withdrawals made from account balances not funded with physical deposits.

    The letter further reminded the commercial banks that they are now required to submit a utilisation report to the Bank of Ghana for each withdrawal of foreign currency cash not funded with physical cash deposits.

    It added that “the report must clearly indicate the purchase and usage of withdrawn funds”.

    The letter to the Banks stated that following the importation, banks are also requested to submit a utilisation report to the Bank of Ghana, detailing how the imported funds were used.

    It is unclear for now what might have influenced this directive from the Bank of Ghana and whether this is part of several actions the regulator has taken to ensure that all the players abide by foreign exchange guidelines and regulations.

    This follows the International Monetary Fund’s (IMF) endorsement of the Bank of Ghana’s strict enforcement of foreign exchange regulations and guidelines.

    According to the IMF, these actions and measures are needed to “broaden financial integrity compliance with anti-money laundering rules and broader transparency in the FX [forex] market”.

    The Director of Communications at the IMF, Julie Kozack, was responding to a question posed by some journalists during a press conference in Washington DC, USA, on 11 September 2025.

    Mrs Kozack argued that these directives “are intended to reinforce the role of the cedi as the sole legal tender in the country”.

    “They’re meant to tighten controls on foreign currency transactions and to promote formal channels for the provision of remittances and trade,” the Director of Communications at the IMF stated.