Fiscal Discipline: A Cornerstone for Ghana's Economic Recovery, Says IMF
As the 2026 national budget approaches, the International Monetary Fund (IMF) is emphasizing 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 offering guidance to ensure a sustainable path forward.
The IMF's warning against repeating past fiscal slippages is particularly relevant as the government aims to clear outstanding payables and maintain macroeconomic stability. After successfully navigating debt restructuring and fiscal challenges in 2024, Ghana's economic outlook remains cautiously optimistic but fragile.
The country is currently implementing a $3 billion IMF-supported program designed to restore macroeconomic stability, rebuild reserves, and achieve debt sustainability. This program comes after years of fiscal imbalances and a debt restructuring in 2023. The success of the program hinges on the government's ability to manage limited resources effectively while maintaining a credible fiscal framework.
IMF Resident Representative in Ghana, Dr. Adrian Alter, emphasized the importance of strict adherence to the Fiscal Responsibility Act, particularly the goal of maintaining a 1.5 percent primary surplus. Dr. Alter stated, 'Fiscal discipline is crucial, especially after the debt restructuring and fiscal slippages of 2024. With limited resources and the target of a 1.5% primary surplus, the government must prioritize projects, enhance spending efficiency, and protect vulnerable groups.'
Dr. Alter also highlighted the need for Ghana's fiscal consolidation to be accompanied by stronger domestic revenue mobilization. He pointed to an ongoing comprehensive 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 social protection to remain a central pillar of Ghana's economic strategy. Dr. Alter highlighted programs like the Livelihood Empowerment Against Poverty (LEAP) initiative, the Ghana School Feeding Programme, and the National Health Insurance Scheme (NHIS) as essential safety nets that should not be compromised.
In summary, the IMF's guidance underscores the importance of fiscal discipline, domestic revenue mobilization, and social protection in Ghana's economic recovery. As the 2026 budget is crafted, these principles will be pivotal in shaping a sustainable and resilient future for the country.
