Policy analyst Bright Simons has cautioned that Ghana’s potential early exit from its $3 billion International Monetary Fund (IMF) program risks rendering critical fiscal targets “irrelevant” by 2028, as political pressures eclipse long-term structural reforms.
The IMANI Africa vice president criticized ongoing discussions between the government and IMF officials, suggesting both parties prioritize short-term optics over systemic economic transformation.
“The IMF will do a victory lap, the government will join them, and by 2028, we’ll realize we missed the targets but the program will already be over,” Simons said during an interview on PM Express Business Edition. He argued that Ghana’s history of treating IMF engagements as transactional rather than transformative undermines fiscal discipline once external oversight lapses.
Ghana secured the IMF bailout in 2023 after defaulting on its $28 billion Eurobond debt, agreeing to reforms aimed at reducing public debt from 88% to 55% of GDP by 2028. However, recent talks of exiting the program early fueled by improved currency stability and a primary surplus target have raised concerns. Simons likened the move to Kenya’s 2021 IMF exit, which preceded a $1.5 billion Eurobond issuance and subsequent Gulf loans amid renewed liquidity crunches.
Simons questioned the government’s commitment to sustaining reforms beyond the IMF’s monitoring, noting that political cycles often prioritize immediate gains over systemic change. “The real issue is whether we’re serious about structural reform or just crafting a good investor narrative,” he said, pointing to stalled initiatives in energy sector restructuring and tax base expansion.
His critique aligns with broader skepticism among economists. While Ghana’s cedi has rebounded 15% against the dollar since January 2024 and inflation has eased to 23%, debt servicing still consumes 47% of government revenue. The IMF’s latest review praised Ghana’s “strong progress” but flagged risks from delayed energy sector reforms and lagging social spending.
Simons reserved sharp criticism for the IMF, accusing it of enabling premature exits to showcase success stories. “If the IMF truly wanted Ghana to hit its 2028 targets, it would have pushed for a program extension to maintain leverage,” he argued. Ghana’s current program runs through 2026, but the government has hinted at an early return to international bond markets a move Simons warned could revive reckless borrowing without IMF safeguards.
Ghana’s debate mirrors dilemmas across Africa, where 21 countries are under IMF programs. Nigeria, facing similar pressures, has resisted IMF involvement despite a worsening currency crisis, while Kenya’s post-IMF borrowing spree has deepened debt vulnerabilities. Simons noted a growing trend of nations “trading IMF oversight for quick cash,” often from non-traditional lenders like Gulf sovereign funds, which impose less transparency.
For Ghana, early exit risks repeating past cycles. The country completed a 2015–2019 IMF program only to see debt surge from 63% to 88% of GDP by 2022, driven by energy sector bailouts and pandemic spending. This time, the government insists structural changes such as the Gold-for-Oil scheme and digital tax reforms are irreversible. Yet analysts note that energy sector debt, which hit $2 billion in 2023, remains unresolved, and tax evasion costs Ghana $2.8 billion annually.
As Ghana eyes a market return, the IMF’s role as a disciplinarian faces scrutiny. The Finance Ministry has pledged to uphold reform momentum, but Simons’ warnings underscore a regional reality: without external accountability, political imperatives often trump fiscal prudence. With Sub-Saharan Africa’s debt distress at a decade high, Ghana’s choices may signal whether post-IMF independence fosters resilience or relapse.
For citizens, the stakes are tangible. Despite macroeconomic gains, unemployment remains at 14%, and poverty rates hover near 24%. “A strong cedi means little if jobs and living costs don’t improve,” said Accra-based trader Kwame Asare. As the 2028 election cycle looms, the government’s reform rhetoric will face its toughest test: delivering shared prosperity, not just stabilized metrics.
