Regardless of obvious financial positive factors, notably the latest stability of the native foreign money, the Africa Coverage Lens (APL) has warned that Ghana’s financial system is working on “borrowed breath” somewhat than elementary energy.
In a press release reacting to the injection of US$367 million from the Worldwide Financial Fund (IMF) following the fourth evaluation of its Prolonged Credit score Facility Programme, the APL mentioned indicators level to an overreliance on overseas help for the financial system’s survival.
The group cautioned that until home-grown options are applied, the nation dangers dealing with a serious financial setback.
“Ghana’s financial system at the moment is working on borrowed breath — momentary fixes, not elementary energy,” the APL acknowledged.
“The IMF disbursement is sort of a steroid shot: it boosts reserves, props up the cedi, and offers a beauty uplift to market confidence. However the true muscle tissues — home manufacturing, entry to reasonably priced credit score, and a disciplined fiscal framework — stay weak and underdeveloped.”
“Till these foundational points are addressed, every overseas injection solely postpones the inevitable collapse.”
In line with the group, Ghana does not want extra “steroids” however somewhat “structural health” that may solely be achieved via daring reforms, elevated native productiveness, and a progress mannequin rooted within the nation’s personal realities somewhat than being outsourced to Washington.
Beneath is the complete assertion by APL:
Fiscal affect of IMF disbursement: Actual reform, not Washington cures
Ghana’s financial restoration is leaning closely on overseas lifelines, the most recent being a US$367 million disbursement from the Worldwide Financial Fund (IMF) following the fourth evaluation of its Prolonged Credit score Facility program. This injection of money, whereas well timed, exposes a deeper and extra uncomfortable reality: the financial system is surviving on exterior steroids, whereas its core progress drivers, home manufacturing, reasonably priced credit score, and constant fiscal self-discipline, stay dangerously underdeveloped. Although the disbursement has boosted reserves and stabilized the foreign money, it masks the structural weak point that continues to outline Ghana’s macroeconomic panorama.
The disbursement pushes Gross Worldwide Reserves from US$10.67 billion to an estimated US$11.04 billion, elevating import cowl marginally from 4.7 to 4.8 months. A stronger reserve place helped the cedi admire sharply from GHS 14.15 to 11.85 per greenback, a 16% acquire inside a month. However this foreign money bounce is externally induced, not domestically earned. The actual manufacturing financial system stays sluggish, with actual personal sector credit score progress sliding into destructive territory at −1.1% in April 2025. In less complicated phrases, companies can’t entry reasonably priced capital, and productive sectors aren’t main the restoration.
The fiscal affect of the disbursement is equally paradoxical. Whereas the GHS 4.35 billion equal of IMF money helped finance 22% of the cumulative fiscal deficit for early 2025, it solely delays the reckoning with Ghana’s persistent overspending and income underperformance. Main steadiness and total deficit indicators stay destructive, and authorities expenditure continues to outpace income in structural phrases. With out severe income mobilization and expenditure management reforms, these exterior inflows merely plug short-term holes in a leaky ship.
On the financial entrance, whereas Web International Property jumped to GHS 134.5 billion and liquidity circumstances improved, lending to the productive personal sector has stagnated. Banks stay risk-averse amid excessive non-performing mortgage ranges, with NPLs hovering round 23.6%. The monetary sector’s liquidity could also be enhancing, however that liquidity shouldn’t be flowing into the true financial system. This can be a clear indication that the supposed “restoration” shouldn’t be broad-based, it’s trickling down slowly, if in any respect.
Furthermore, Ghana’s reliance on concessional debt, whereas preferable to business borrowing, nonetheless contributes to long-term debt accumulation. With complete public debt standing at GHS 769.4 billion (55% of GDP), the true drawback shouldn’t be debt alone, however what the borrowed cash is used for. With minimal capital expenditure and weak industrial progress, the debt isn’t fueling transformation, it’s merely sustaining survival.
Ghana’s financial system at the moment is working on borrowed breath, momentary fixes, not elementary energy. The IMF disbursement is sort of a steroid shot: it pumps up reserves, props up the cedi, and provides a beauty enhance to market confidence. However the true muscle tissues, home manufacturing, entry to reasonably priced credit score, and a disciplined fiscal framework, stay weak and undertrained. Till these foundational points are addressed, every overseas injection solely postpones the inevitable collapse. Ghana doesn’t want extra steroids; it wants structural health. And that can solely come via daring reforms, native productiveness, and a home-grown progress mannequin that’s not outsourced to Washington.
Creator:
Prof. Isaac Boadi
Dean, School of Accounting and Finance, UPSA
Analysis Fellow, Africa Coverage Lens
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DISCLAIMER: The Views, Feedback, Opinions, Contributions and Statements made by Readers and Contributors on this platform don’t essentially signify the views or coverage of Multimedia Group Restricted.
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