Fiscal Discipline: A Cornerstone for Ghana's Economic Recovery, Says IMF
As the 2026 national 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 budget, with the IMF urging the government to avoid past fiscal pitfalls.
The IMF's warning is particularly relevant as the government aims to settle outstanding debts and maintain macroeconomic stability. After successfully navigating debt restructuring and fiscal challenges in 2024, Ghana's economic outlook remains cautiously optimistic but fragile.
Ghana is currently implementing a $3 billion IMF-supported program designed to restore macroeconomic stability, rebuild reserves, and ensure debt sustainability. This program follows years of fiscal imbalances and a debt restructuring in 2023. The IMF emphasizes that the program's success 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, underscores the importance of strict adherence to the Fiscal Responsibility Act, especially the goal of maintaining a 1.5 percent primary surplus. He highlights the significance of fiscal discipline, especially after the fiscal slippages experienced in 2024.
"Given limited resources and the target of a 1.5% primary surplus, the government must prioritize projects, enhance spending efficiency, and safeguard vulnerable populations," Dr. Alter advised. He also stressed that Ghana's fiscal consolidation efforts should be accompanied by stronger domestic revenue mobilization.
One key step towards this goal is an ongoing comprehensive VAT reform, which aims to broaden the tax base and simplify the system, thereby improving compliance and revenue collection. Dr. Alter praised the government's commitment to this reform.
Despite calls for tighter fiscal controls, the IMF advocates for the centrality 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.
