Ghana nears successful completion of the ECF programme.
The IMF and the Ghanaian authorities have reached a staff-level agreement on the sixth and final review of the 3-year Extended Credit Facility (ECF) programme, effectively signalling Ghana’s successful completion of the Fund-supported fiscal adjustment programme. Subject to IMF Executive Board approval by August 2026, Ghana could receive a final disbursement of USD385.0mn, bringing the financing programme to a close. Despite broad satisfaction with programme implementation and macroeconomic progress, the IMF also highlighted delays in structural reforms and stressed the need to sustain reform momentum to reinforce economic resilience.
Transitioning to a purely technical support programme to lock-in the ECF gains
Having laid out the significant success in restoring macroeconomic stability, the IMF and the Ghanaian authorities acknowledged the need for sustaining the reform momentum against the backdrop of lingering fiscal risk from State-Owned Enterprises (SOEs), ongoing quasi-fiscal activities, and the elevated external uncertainty. In view of this, the authorities also reached a staff-level agreement with the Fund on a 36-month Policy Coordination Instrument (PCI) – a non-financing arrangement focused on technical support to sustain the momentum in structural reforms and build resilience beyond the ECF programme. We laud the authorities’ decision to transition from a financing arrangement into a non-financing technical support with the IMF. We believe this will help to anchor market perception about the post-IMF policy outlook and minimise the risk associated with a complete programme exit. We also view this as an indication that the authorities intend to continue with policy credibility and structural reforms into the 2028 general elections as well as anchor the critical near-term debt service outlook (Please see full report for our views on PCI objectives).
Our other views on the PCI and IMF Statement
- The decision to pivot into a non-financing support reflects the IMF’s confidence in Ghana’s balance of payment position. As a purely technical support which does not include financial package, we interpret the staff-level agreement on a 36-month Policy Coordination Instrument as underscoring the IMF’s positive assessment of Ghana’s external buffers. With gross international reserve (ex. Encumbered assets) at 5.1 months of import cover as of February 2026, Ghana appears in a strong position to absorb external shocks without IMF balance of payment support. However, the delays in implementing structural reforms under the ECF programme, the heightened external uncertainty and the upcoming maturity rollover risk requires sustained reforms to strengthen fiscal resilience.
- The IMF may accept a softer fiscal rule in 2027, subject to key conditions. We were surprised to note the IMF considered lowering the primary surplus from 2027, subject to certain fiscal safeguards. We had thought that the new fiscal rule of minimum 1.5% primary surplus will be a non-negotiable medium-term anchor. However, the IMF indicated that staff assessment show that lowering the primary surplus to 0.5% of GDP from 2027 will remain consistent with safeguarding debt sustainability, subject to further progress in strengthening public financial management, including fiscal risk management, SOEs governance, and quasi-fiscal activities. In our view, this suggests two important conversations that probably transpired during the PCI negotiation: (1) The Ghanaian authorities and the IMF may have discussed and agreed that the 1.5% primary surplus is quite ambitious and constraining in a framework that seeks to support growth-friendly fiscal adjustment (2) assurance of stronger fiscal risk management and governance reforms in 2026 to create fiscal space for increased but prudent primary expenditure from the 2027 fiscal year. In view of this, we look forward to the IMF staff projections in the Executive Board approval and Ghana’s 2027 budget for the agreed fiscal anchor in the upcoming years with particular focus on a likely amendment to the recently amended Public Financial Management (PFM) Act.