International Monetary Fund (IMF) programmes have not consistently addressed the underlying political-economy drivers of Ghana's debt accumulation. This assertion comes from Dr. Opoku-Afari, a former First Deputy Governor of the Bank of Ghana.
Dr. Opoku-Afari explained that these programmes often fail to tackle institutional issues stemming from electoral competition and patronage-related spending pressures. He noted that rollover and liquidity risks were sometimes underestimated, and stress-testing of domestic debt with the banking system was limited. The coverage of the wider public-sector balance sheet, including State-Owned Enterprises (SOEs) and contingent liabilities, also remained incomplete.
This critique fits into Ghana's long history of engaging with the IMF, which has seen the country enter multiple programmes over decades. Ghana's debt sustainability challenges persisted for 12 years, breaching Debt Sustainability Analysis (DSA) indicators during that period. The country's evolving debt structure and market access raise questions about whether it was appropriately treated as a Lower Income Country-DSF case throughout this time.
Dr. Opoku-Afari, a former Mission Chief at the IMF, detailed these findings in his paper titled “How not to Miss a Crisis: Lessons from Ghana.” He highlighted that while macroeconomic surveillance did not ignore Ghana's rising vulnerabilities, three key limitations stood out. These included optimistic Debt Sustainability Analysis baselines, insufficient internalisation of domestic-debt dynamics, and a prioritisation of near-term fiscal consolidation over structural reforms.
The implications of these findings are significant for Ghana's current and future economic policy. Decision-makers must consider how to implement deeper structural reforms that address the root causes of debt, rather than relying solely on short-term fiscal measures. This includes reforms in energy pricing, State-Owned Enterprise governance, and tax policy and administration. Markets will closely watch for evidence of comprehensive structural changes that can build long-term economic resilience and reduce reliance on repeated IMF interventions.
Dr. Opoku-Afari's analysis points to a broader methodological question regarding the IMF's approach to Ghana. He suggested that the framework's limited ability to quantify rollover, liquidity, and currency-related risks may have led to underestimation of rapid market closure probability. This became acute as investor confidence deteriorated following rating actions, such as Moody’s downgrade in February 2022. The sovereign–bank “doom loop,” where government debt issues impact the banking sector, was also not always assessed comprehensively.
The former Deputy Governor stressed that IMF-supported programme design often prioritised near-term consolidation over reforms addressing structural drivers of recurrent debt accumulation. This recurring critique of Ghana’s engagement with the IMF suggests that programme conditionality has historically favoured fiscal consolidation over comprehensive structural reform. Addressing these deep-seated issues is crucial for Ghana to achieve sustainable economic growth and avoid future debt crises.
Ghana's economic stability depends on tackling these systemic issues. Without addressing the political-economy roots of debt, the country risks a cycle of debt accumulation and reliance on external support. The insights from Dr. Opoku-Afari provide a critical perspective for policymakers as Ghana navigates its current economic challenges and seeks lasting solutions.