The International Monetary Fund (IMF) has supported Ghana\u2019s plan to adopt a less restrictive fiscal approach from 2027, saying the move could create room for increased development spending without undermining debt reduction targets.<\/p>\n
In its latest Article IV Consultation and proposed Policy Coordination Instrument (PCI) report, the Fund said Ghana\u2019s improving debt position and progress in restoring macroeconomic stability provide justification for adjusting its medium-term fiscal strategy.<\/p>\n
The IMF said the country could reduce its primary surplus target from 1.5% of Gross Domestic Product (GDP) to 0.5% from 2027, while still maintaining its objective of reducing public debt to 45% of GDP by 2034.<\/p>\n
However, the Fund stressed that the revised fiscal path would depend on the continued implementation of structural reforms to strengthen public finances and prevent renewed fiscal pressures.<\/p>\n
\u201cThe lowering of the fiscal primary surplus will be supported by an ambitious package of fiscal structural reforms to contain quasi-fiscal pressures and safeguard debt sustainability,\u201d the report said.<\/p>\n
The IMF identified improved tax administration, stronger public financial management and better oversight of state-owned enterprises as key measures required to maintain fiscal discipline.<\/p>\n
Ghana\u2019s approved 2026 budget currently targets a primary surplus of 1.5% of GDP, in line with existing programme commitments.<\/p>\n
According to the IMF, reducing the target from 2027 would allow government to increase spending on priority areas while maintaining safeguards for debt sustainability.<\/p>\n
The Fund said Ghana still faces significant development financing needs, noting that more than 16% of GDP will be required by 2030 to support investments linked to the Sustainable Development Goals.<\/p>\n
It highlighted education, healthcare, infrastructure, agriculture and energy as sectors where increased investment could support economic growth, attract private capital and create jobs.<\/p>\n
The proposed PCI programme also includes measures to increase domestic revenue through tax reforms, improved compliance and reviews of customs, excise and income tax laws.<\/p>\n
The IMF said Ghanaian authorities welcomed the revised fiscal approach and indicated that the additional fiscal space would be directed towards development programmes and employment creation.<\/p>\n
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