Ghana's economy has shown notable resilience in the eight months following the successful conclusion of its International Monetary Fund (IMF) program. The cedi has remained broadly stable, and the domestic bond market has reopened after a three-year hiatus. This positive assessment comes from Julien Ayippey, Head of Research, Analytics and Strategy at First National Bank, ahead of the Mid-Year Budget Review.
The stability achieved is largely attributed to the discipline enforced by the IMF-supported program. Public debt has been contained, and the Sinking Fund, designed to manage debt, is now operational. This fund receives 7% of gross non-oil tax revenue and foreign-currency dividends, providing a crucial mechanism for debt management.
This progress fits into Ghana's broader economic narrative of striving for fiscal consolidation and sustainable growth. The successful completion of the Extended Credit Facility (ECF) marks a significant milestone. It allows Ghana to transition to the Fund's Policy Coordination Instrument, which offers monitoring without direct financial assistance.
Ayippey highlights that maintaining spending discipline amidst various pressures is a significant achievement. He notes that while some may view this as restraint rather than transformation, sustained discipline is essential. The challenge now is to ensure that improved economic indicators translate into better jobs and living standards for Ghanaians.
A key concern is the recent reversal in inflation trends. Inflation fell from 23.5% in January 2025 to 3.2% in March 2026, a low not seen since 1985. However, it has since risen for three consecutive months, reaching 5.3% in June. This increase is primarily driven by non-food items, with services inflation rising by 9.4%, impacting transport, rent, and school fees.
The Bank of Ghana has maintained its policy rate at 14% since May. While June's 5.3% inflation remains within the budget's 8% end-year target, the upward trend demands attention. Renewed U.S.–Iran tensions have pushed Brent crude prices above US$89, impacting Ghana, which imports almost all its refined fuel.
Ghana faces substantial domestic debt maturities, with GHS 50.3 billion due in 2027 and GHS 45.8 billion in 2028. Additionally, the country has Eurobond repayments of US$1 billion in 2026 and US$2 billion in 2027. The government's plan to raise GHS 20.2 billion in seven-to-ten-year paper by year-end is a step in the right direction.
The 91-day Treasury bill rate has significantly decreased from 28.4% in January 2025 to about 5.9% today. This makes it cheaper for the government to prepare for these upcoming debt obligations. Transparency regarding the Sinking Fund's balance and a quarterly bond issuance calendar are crucial for building investor confidence.
The absence of direct IMF supervision means Ghana's fiscal discipline will face its true test, especially during an election cycle. The Mid-Year Budget Review should confirm the primary balance against the 1.5%-of-GDP target. It must also verify if revenue is tracking the GHS 268 billion goal and confirm zero central bank financing for 2026.
Lower interest rates are already stimulating the banking sector. Private-sector credit grew by 41.2% year-on-year to GHS 119.6 billion by June, a real growth of 34%. Non-performing loans have also decreased from 23.1% to 16.1%. These conditions are conducive for a genuine lending cycle, but credit growth must translate into job creation and improved living standards.
The review should provide details on the utilization of the GHS 10 billion Big Push infrastructure bond and job numbers from the 24-hour economy program. Savers, who financed the crisis, deserve a clear plan for their capital. The current low returns on short-term instruments necessitate guidance towards longer-dated bonds, collective investment schemes, and the Ghana Stock Exchange.
Finally, the cocoa sector, a cornerstone of Ghana's economy, requires attention. The shift from offshore syndicated loans to local financing for cocoa seasons needs to ensure timely payments to farmers. This transition is vital for the sustainability of the sector and the livelihoods of many Ghanaians.