As the 2026 budget nears, the International Monetary Fund (IMF) is emphasizing the critical role of fiscal discipline in Ghana's economic recovery journey. This comes as Finance Minister Dr. Cassiel Ato Forson prepares to unveil the country's financial blueprint for the upcoming year.
The IMF's warning against repeating past fiscal missteps is particularly pertinent as Ghana aims to clear outstanding debts and maintain macroeconomic stability. After successfully navigating debt restructuring and fiscal challenges in 2024, Ghana's economic outlook remains cautious but promising. The country is currently implementing a $3 billion IMF-supported program designed to restore macroeconomic stability, rebuild reserves, and achieve debt sustainability following years of fiscal imbalances and a debt restructuring in 2023.
According to the IMF, the program's success hinges on the government's ability to manage resources efficiently while upholding a credible fiscal framework. Dr. Adrian Alter, the IMF's Resident Representative in Ghana, emphasized the importance of strict adherence to the Fiscal Responsibility Act, especially the goal of maintaining a 1.5% primary surplus on a commitment basis. Dr. Alter highlighted that fiscal discipline is crucial, especially after the fiscal slippages experienced in 2024.
To achieve this, the government must prioritize projects, enhance spending efficiency, and safeguard vulnerable groups, all while managing limited resources. Dr. Alter also stressed that Ghana's fiscal consolidation efforts should be accompanied by stronger domestic revenue mobilization. He pointed to an ongoing comprehensive Value-Added Tax (VAT) reform as a key step toward broadening the tax base and simplifying the system, thereby improving compliance and revenue performance.
Despite calls for tighter fiscal controls, the IMF advocates for the preservation of social protection programs as a central pillar of Ghana's economic strategy. Key programs like the Livelihood Empowerment Against Poverty (LEAP) initiative, the Ghana School Feeding Programme, and the National Health Insurance Scheme (NHIS) are highlighted as essential safety nets that should not be compromised. This balance between fiscal discipline and social protection is crucial for Ghana's long-term economic stability and growth.
