The International Monetary Fund has indicated that Ghana will be in a stronger position to adopt a more flexible fiscal policy from 2027, allowing the government to expand development expenditure while remaining firmly on course to achieve its long-term public debt reduction objectives.
In its latest Article IV Consultation together with the proposed Policy Coordination Instrument report, the Fund stated that Ghana’s improving debt profile and strengthening macroeconomic conditions provide sufficient justification for easing the pace of fiscal consolidation after 2026. According to the IMF, the revised fiscal framework would create additional budgetary capacity for strategic investments without compromising the country’s commitment to restoring long-term fiscal sustainability.
The report explained that Ghana’s primary fiscal surplus target could be reduced from 1.5 percent of Gross Domestic Product to 0.5 percent beginning in 2027 while still preserving the government’s objective of lowering public debt to 45 percent of Gross Domestic Product by 2034. The Fund emphasised that the proposed adjustment reflects growing confidence in Ghana’s improving economic fundamentals and its progress in restoring fiscal discipline.
Nevertheless, the IMF cautioned that the proposed fiscal flexibility must be supported by the sustained implementation of comprehensive structural reforms aimed at strengthening domestic revenue mobilisation, enhancing public financial management, improving expenditure controls and reinforcing governance and oversight across state owned enterprises.
According to the report, the reduction in the primary fiscal surplus target will be underpinned by an ambitious programme of fiscal reforms designed to contain quasi fiscal pressures while safeguarding debt sustainability over the medium and long term.
The Fund further observed that Ghana continues to face substantial financing requirements in its pursuit of the Sustainable Development Goals. It estimated that the country will need to allocate more than 16 percent of Gross Domestic Product by 2030 towards critical sectors including education, healthcare and infrastructure to achieve its development ambitions.
The IMF also highlighted the importance of directing greater investment towards labour intensive industries such as agriculture and energy, noting that stronger public investment in these sectors could stimulate private sector participation, expand value addition across the economy and generate significant employment opportunities, particularly for the country’s growing youthful population.
Under the proposed Policy Coordination Instrument, Ghana is expected to increase primary public expenditure from 2027, placing greater priority on capital investment projects while simultaneously pursuing additional domestic revenue through comprehensive tax reforms, stronger compliance measures and enhanced revenue administration.
The Fund disclosed that Ghanaian authorities share its assessment that a more accommodating fiscal stance is warranted in view of the country’s improving debt dynamics and the progress achieved through ongoing economic reforms.
According to the IMF, government officials believe the proposed fiscal adjustment is supported by decisive policy measures and the sustained improvement in Ghana’s public debt trajectory, making it appropriate to gradually shift attention towards development financing while preserving fiscal responsibility.
The government also indicated that the additional fiscal space created under the revised framework will be channelled into priority national development programmes, infrastructure expansion and employment generation initiatives while maintaining its commitment to implementing fiscal reforms and strengthening macroeconomic stability.
The IMF concluded that Ghana’s approved 2026 budget, which targets a primary fiscal surplus of 1.5 percent, remains fully aligned with the objectives of the current economic programme. However, the proposed reduction in the surplus target from 2027 is expected to provide the government with greater financial flexibility to support growth enhancing investments without derailing the country’s long-term debt sustainability strategy.
