Ghana Exits the IMF Programme: Can Fiscal Discipline Survive Without Washington's Oversight?

When Ghana entered a $3 billion Extended Credit Facility with the International Monetary Fund in July 2023, the country was in the throes of its most severe economic crisis in four decades. Inflation had rocketed to 54 percent, the cedi had lost 40 percent of its value against the dollar in a single year, and the government had defaulted on $17 billion in external debt, becoming the first African country to restructure its commercial debt under the G20 Common Framework.

Three years later, as the programme enters its final quarter, the transformation is remarkable by any standard. GDP growth has recovered to 4.5 percent, inflation has been brought down to single digits (8.2 percent in March 2026), and the cedi has stabilised at approximately GH₵15.4 to the dollar — still far weaker than the pre-crisis GH₵7.5 but no longer in freefall. The government is preparing to return to the international eurobond market with a planned $2 billion issuance, a move that would have been inconceivable just eighteen months ago.

But the question that preoccupies economists, investors, and opposition politicians alike is not whether Ghana has met the IMF's targets — it has, with few exceptions — but whether the fiscal discipline imposed by the programme can survive the political pressures that destroyed it in the first place.

The Fiscal Arithmetic

The numbers tell a story of genuine adjustment. Ghana's primary balance — the fiscal position before debt service payments — has swung from a deficit of 4.7 percent of GDP in 2022 to a surplus of 1.5 percent in 2025. Domestic revenue mobilisation has increased from 13 percent of GDP to 16.8 percent, driven primarily by the expansion of the tax base (the number of registered taxpayers has grown from 2.7 million to 5.1 million) rather than rate increases.

The debt restructuring, completed in two phases — a domestic debt exchange in 2023 that affected government bonds and pension funds, and an external restructuring in 2024 that reduced commercial bilateral debt by $10 billion — has brought the debt-to-GDP ratio down from a peak of 83 percent to an estimated 62 percent. The government has committed to bringing this below 55 percent by 2028.

"This is not a cosmetic improvement," said Dr. John Gatsi, Dean of the University of Cape Coast Business School. "The structural changes to revenue collection, public financial management, and debt management are real and measurable. The question is whether they are irreversible."

The Eurobond Return

The planned eurobond issuance, expected in Q3 2026, will be the definitive market test of Ghana's restored creditworthiness. Lead managers Goldman Sachs and Standard Chartered have conducted preliminary investor soundings in London and New York, and the early feedback has been cautiously positive: investors are indicating appetite for a 10-year issue at yields of 8.5 to 9 percent, well below the 14 percent levels that would have been required at the height of the crisis.

The proceeds are earmarked for refinancing shorter-dated commercial debt and financing infrastructure projects, specifically the Pwalugu Multi-Purpose Dam ($1.2 billion) and the Accra-Kumasi railway upgrade ($800 million). The government has emphasised that the eurobond proceeds will not be used for recurrent expenditure, a commitment that will be monitored by a new fiscal responsibility council established under the 2025 Fiscal Responsibility Act.

The Political Economy Problem

The IMF programme has imposed a series of politically costly measures: the removal of fuel subsidies (saving GH₵4.2 billion annually), the rationalisation of civil service allowances (saving GH₵1.8 billion), and the introduction of a 1 percent electronic transaction levy (e-levy) that has proven both politically toxic and technically unreliable, generating only GH₵800 million against a projected GH₵6.9 billion in its first year.

The Mahama administration, which took office in January 2025 after defeating Dr. Mahamudu Bawumia in the December 2024 election, has walked a careful line. It has maintained the core fiscal framework inherited from the Bawumia government's IMF negotiations while introducing its own "24-hour economy" initiative, which aims to boost manufacturing output through extended operating hours and night-shift subsidies.

"We did not ask for the IMF programme, but we inherited its obligations, and we will honour them," Finance Minister Cassiel Ato Forson said in February. "What we will not do is pretend that fiscal discipline is an end in itself. The purpose of the programme is to create the conditions for economic growth that benefits ordinary Ghanaians, not to satisfy Washington's spreadsheets."

The Bawumia vs Mahama Economic Debate

The economic legacy debate between former Vice President Bawumia and President Mahama has become the central fault line of Ghanaian politics. Bawumia's supporters argue that the painful reforms — the debt restructuring, the tax increases, the subsidy removals — were initiated under his watch and that the Mahama government is simply harvesting the fruits of those decisions. Mahama's supporters counter that Bawumia, as the head of the Economic Management Team, bears primary responsibility for the crisis that necessitated the IMF programme in the first place.

The data provides ammunition for both sides. The fiscal consolidation was indeed initiated under the Bawumia-led economic team, which negotiated the IMF programme and implemented the initial debt restructuring. But the economic recovery — the return of growth, the taming of inflation, the stabilisation of the cedi — has accelerated under Mahama, driven in part by improved investor confidence and the resolution of the domestic debt exchange.

"For the average Ghanaian, this debate is academic," said Abraham Amaliba, a governance analyst at the Centre for Democratic Development. "What matters is whether their salary can buy a bag of rice at the end of the month. On that metric, the improvement is real but fragile. A single shock — a currency depreciation, a commodity price spike, a fiscal slippage — could erase the gains very quickly."

The Exit Challenge

IMF programme exits in Africa have a mixed historical record. Of the 23 African countries that have completed IMF programmes since 2010, only 11 have maintained fiscal discipline for more than two years post-exit. The most common cause of backsliding is pre-election spending — governments face enormous pressure to deliver visible benefits to voters in the months before an election, and without the IMF's quarterly reviews as a disciplining mechanism, the temptation to open the fiscal taps can be overwhelming.

Ghana's next election is not until December 2028, providing a reasonable buffer. But the local government elections, scheduled for late 2027, will be an early test of whether the government can resist the urge to use fiscal resources for political patronage at the subnational level.

The government's own projections acknowledge the risk. The medium-term budget framework, presented to Parliament in March, assumes primary surpluses declining from 1.5 percent of GDP in 2026 to 0.8 percent in 2027 and 0.3 percent in 2028 — a trajectory that suggests the political class already anticipates a gradual relaxation of fiscal discipline.

What Comes Next

Ghana's IMF exit is, in many ways, the easy part. The hard part begins on the day the Fund's monitors leave Accra, when the government must sustain fiscal discipline without the external anchor that the programme provides. The new Fiscal Responsibility Council, if it operates with genuine independence, could serve as a domestic substitute. The e-levy, if its technical problems can be resolved, could provide a sustainable revenue stream. The eurobond return, if it proceeds at the projected yields, would signal restored market confidence.

But the fundamental challenge remains: Ghana must grow its economy fast enough to outpace its debt obligations while simultaneously investing in the infrastructure, education, and health systems that its population desperately needs. The IMF programme has bought the country time and credibility. What Ghana does with that time will determine whether 2023-2026 is remembered as a turning point or merely a pause before the next crisis.