The news that the International Monetary Fund has recommended a three month extension of its ongoing three year Extended Credit Facility economic recovery and financial bail-out programme with Ghana has unsurprisingly generated circumspection and debate in the country.
The IMF’s recommendation is to allow additional time for reforms required to complete the sixth and final programme review. If endorsed, the extension will shift the end date of Ghana’s ECF arrangement from May 2026 to August 2026.
Some Ghanaians are expressing frustration, seeing it as unnecessary given recent strong performance and a desire for self-management. Such critics argue that Ghana is performing well and does not need prolonged IMF supervision,, viewing it as bureaucratic convenience rather than necessity, especially as Ghana has met targets.
They contend that the IMF is trying to extend its oversight beyond the program’s natural end, suggesting Ghana should reject it.
On the other hand, government views it as a procedural step for orderly conclusion and continued support, highlighting achievements in meeting targets, though debates persist around specific issues like GoldBod and fiscal discipline. The government sees it as vital for sustained macroeconomic stability, with the IMF’s oversight helping to anchor reforms, more so since Ghana has met key fiscal and growth targets, leading to increased reserves and falling inflation, with the extension seen as ensuring a smooth finish.
A core tension is between Ghana’s sovereign right to manage its affairs and the IMF’s conditions for financial support; while the government embraces the IMF’s continued engagement as a validator and stabilizer, a segment of the public feels Ghana has outgrown the need for such extensions, citing strong domestic efforts and results
This newspaper supports government’s inclination to accept the extension. While the proposed extension of just three months would give the Fund a disproportionate amount of leverage in influencing macroeconomic policy for 2026 despite only US$200 million being left for Ghana to receive out of the US$3 billion total it would be prudent to learn invaluable lessons from yester-years.
Firstly, the rush to exit the previous IMF programme by the immediate past Akufo-Addo administration did not end well, even though excuses such as the arrival of COVID 19 and the outbreak of the Russia Ukraine was have been made for the economic crisis that finally erupted in late 2022.
Secondly, the replacement of the IMF’s unpopular but prudent demand management policies with populist expansionary supply side policies have repeatedly failed in the past when the transition was attempted to soon.
The Mahama administration has a four year mandate and this newspaper believes that using the first two years of the mandate to cement macro-economic stability on which sustainable expansionary economic policy can be built is the most prudent way to go.
The international investment, financial and development communities are all watching Ghana closely as it rebounds from its worst economic crisis in four decades. We cannot afford to put the ongoing recovery at risk like we have done so many times before, in our rush to resume outstanding economic growth.
