Fiscal Discipline: A Cornerstone for Ghana's Economic Recovery, Says IMF
As the 2026 budget approaches, the International Monetary Fund (IMF) emphasizes the critical role of fiscal discipline in Ghana's economic recovery journey. This message comes as Finance Minister Dr. Cassiel Ato Forson prepares to present the national budget, with the IMF offering a cautious yet optimistic outlook for the country's economic future.
The IMF's warning against past fiscal slippages is particularly relevant as Ghana aims to clear outstanding payables and maintain macroeconomic stability. After successfully navigating debt restructuring and fiscal challenges in 2024, the country's economic outlook remains fragile but promising.
Ghana's current economic strategy involves a $3 billion IMF-supported program designed to restore macroeconomic stability, rebuild reserves, and ensure debt sustainability. This program comes after years of fiscal imbalances and a debt restructuring in 2023. The success of this initiative hinges on the government's ability to manage resources efficiently while adhering to a credible fiscal framework.
Dr. Adrian Alter, the IMF's Resident Representative in Ghana, stressed the importance of strict adherence to the Fiscal Responsibility Act, especially the commitment to a 1.5% primary surplus. He highlighted the significance of fiscal discipline, especially after the fiscal slippages experienced in 2024.
"Given the limited resources and the 1.5% primary surplus target, the government must prioritize projects, enhance spending efficiency, and protect vulnerable groups," Dr. Alter advised. He also emphasized the need for Ghana's fiscal consolidation to be accompanied by stronger domestic revenue mobilization.
One key step towards achieving this is an ongoing comprehensive VAT reform, which aims to broaden the tax base and simplify the system, thereby improving compliance and revenue collection.
Despite calls for tighter fiscal controls, the IMF advocates for the central role of social protection in Ghana's economic strategy. Dr. Alter highlighted essential programs like the Livelihood Empowerment Against Poverty (LEAP) initiative, the Ghana School Feeding Programme, and the National Health Insurance Scheme (NHIS) as vital safety nets that should not be compromised.
In summary, the IMF's guidance underscores the importance of fiscal discipline and social protection in Ghana's economic recovery, urging the government to balance fiscal responsibility with social welfare to ensure a sustainable and resilient future.
