The government said the programme helped reduce inflation, stabilise the cedi and restore economic growth. Authorities are now transitioning to a new IMF arrangement known as the Policy Coordination Instrument, which supports reforms without providing direct financing.
Frank Bannor, Research Associate at the Public and Environmental Economics Research Centre, said Ghana turned to the IMF in 2022 after a sharp economic downturn triggered by global shocks and domestic vulnerabilities. Bannor said inflation surged to about 54.1% in 2022, while the Cedi weakened significantly, trading at around 16 Cedi to the Dollar.
At the same time, public debt rose to about 88% of gross domestic product, exceeding sustainability thresholds. Bannor said this limited Ghana’s ability to borrow from international markets and service existing obligations, forcing the country to seek IMF support under the Extended Credit Facility.
As part of the programme, Ghana undertook debt restructuring measures covering both domestic and external debt. Bannor said about 90% of external debt was restructured, resulting in about $5 billion in debt reduction. The restructuring also extended repayment periods and reduced average interest rates from about 8% to below 5%.
These measures helped reduce the debt ratio to about 45.3% of gross domestic product by the end of 2025, down from 72.5% in 2023 and 61.8% in 2024.
Bannor cautioned that completing the programme does not mean Ghana has repaid its debt. Bannor said full external debt servicing is expected to resume in March 2027, which will place renewed pressure on public finances.
The new Policy Coordination Instrument is expected to focus on maintaining fiscal discipline, ensuring debt sustainability and strengthening oversight of state-owned enterprises. Bannor said attention will also be placed on the financial position of institutions such as the Bank of Ghana, which recorded losses of about $2.1 billion linked to quasi-fiscal operations.
Bannor said sustaining reforms will be critical to prevent a return to past fiscal challenges and to ensure long-term economic stability.
–ChannelAfrica–
