The International Monetary Fund (IMF) has approved the fourth review of Ghana’s $3 billion Extended Credit Facility, unlocking a new disbursement of $367 million.
While acknowledging Ghana’s recent economic resilience, the IMF stressed the urgent need for comprehensive reforms in the energy and cocoa sectors to maintain fiscal discipline and ensure sustainable recovery.
Ghana’s economy exceeded expectations in 2024 and early 2025, driven by robust growth in mining, agriculture, ICT, and manufacturing.
However, pre-election fiscal slippages and delays in structural reforms undermined performance in the latter part of 2024.
Inflation soared to 23.8% by the end of the year—well above IMF targets and twice the Bank of Ghana’s ceiling.
In response, President John Mahama’s administration has rolled out a 2025 budget aimed at achieving a primary fiscal surplus of 1.5% through a combination of revenue generation and spending cuts.
“Bold corrective actions” have been taken, noted IMF Deputy Managing Director Bo Li, who nonetheless cautioned, “Forcefully addressing the challenges in the energy sector and related arrears are critical to contain fiscal risks.”
State-owned power utilities remain burdened by $3.1 billion in debt, attributed to weak revenue collection, historic liabilities, and delayed tariff reforms.
In a bid to generate funds, Parliament is fast-tracking the Energy Sector Levy (Amendment) Bill, which proposes a GH¢1 increase in fuel levies to raise GH¢5.7 billion.
However, analysts warn that these efforts will be ineffective without deep structural reform.
In the cocoa industry, record-high global prices—peaking above $10,700 per tonne—have failed to translate into higher revenues due to local supply constraints. Ageing farms, disease outbreaks, and rampant smuggling continue to suppress production.
In response, the government has initiated a review of COCOBOD to reduce operational inefficiencies and incentivize farmers through better pricing and transparency.
The IMF also stressed the broader need for improvements in public financial management and the performance of state-owned enterprises.
Monetary tightening by the Bank of Ghana and progress in debt restructuring talks under the G20 Common Framework have contributed to recent improvements in the country’s international credit ratings.
Despite these gains, the IMF warned that Ghana’s macroeconomic stability remains precarious.
“Improving tax administration, strengthening expenditure controls, and enhancing SOEs’ efficiency are of the essence to underpin durable adjustment,” Mr. Li emphasized.
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