Ghana has officially concluded its $3 billion Extended Credit Facility (ECF) bailout programme with the International Monetary Fund (IMF).
To maintain fiscal discipline without requiring additional loans from the Fund, the government has transitioned into a non-financing Economic Policy Support Framework.
Reflecting on the journey to this point, economist Mr Isaac Yalley noted that Ghana initially sought the IMF bailout to address a severe economic crisis characterised by unsustainable public debt, double-digit inflation, a rapidly depreciating cedi, and critically low foreign currency reserves.
He explained that the most critical factor forcing the government’s hand was this unsustainable public debt.
Ghana had struggled to service its obligations, which ultimately led to a moratorium on international debt payments and a subsequent default. To stabilise the economy, the IMF arrangement—officially approved in mid-2023—provided the $3 billion credit facility designed to restore macroeconomic stability, safeguard debt sustainability, and unlock additional international financing.
Following the conclusion of the programme, Mr Yalley has urged the government to maintain strict fiscal discipline as Ghana moves out of IMF support.
Speaking on Nyankonton Mu Nsem on Rainbow Radio 87.5FM, he warned that the country must avoid repeating the same spending habits that could force it back to the Fund for financial assistance.
He pointed out that the government now has a vital opportunity to ensure discipline so the nation will not have to return to the IMF.
In particular, Mr Yalley stressed the need for fiscal restraint during election periods, when excessive spending historically puts immense pressure on the economy.
He stated that political activity must not lead to wasteful expenditure, emphasizing that throwing money around for votes could severely damage the economy and undermine the gains made so far.
“At this point, we have to preserve the gains made so it will reflect in our economy, ensure businesses thrive, among others. Going forward, are we sure we will not go back? That has been the challenge for us as a country,” Mr Yalley remarked.
When asked about the specific reforms required to sustain these economic gains, Mr Yalley urged the government to make far better use of the country’s natural resources to support economic growth and national development.
He argued that Ghana must benefit from its natural resources by truly owning them.
He highlighted that civil society groups, such as the Institute of Economic Affairs (IEA), have already argued that the state needs to reject Gold Fields’ application for an extension of its Tarkwa mine lease, which is set to expire in 2027.
He stressed that Ghana must own its natural resources or secure greater benefits from them in order to keep capital within the country, which will inherently help to stabilise the economy.
By: Rainbowradioonline.com/Ghana