Associate Professor of Finance and Economics at the University of Ghana Business School, Professor Godfred Bokpin, has cautioned the government against ending the International Monetary Fund (IMF) programme in 2026.
According to him, any move by the government to exit the programme would be disastrous, saying, “I find it difficult to see how Ghana will survive after the programme.”
Presenting a paper at a programme organised by the Canada Ghana Chamber of Commerce on the topic “2025 Budget in Perspective,” Professor Bokpin said the country should be prepared to face fiscal challenges if the government exits the IMF programme, which ends in 2026.
He attributed the recent sharp increase in utility tariffs to an IMF conditionality, explaining that the IMF Board would not approve the $360 million balance of payment support if the government failed to do so.
President John Mahama’s government has indicated that it will not extend the IMF programme, despite the economy still recovering. The country is expected to start repaying its loans substantially from 2026, which is expected to put severe pressure on the country’s finances.
Going into history, Prof. Bokpin said he finds it difficult to understand why Ghana’s economy has failed to take off since independence, despite once faring better than Malaysia and Singapore, which are now far ahead of Ghana.
“Since 1992, every budget has talked about macroeconomic stability, which is not an end in itself but a means to an end. Ghana’s economy is yet to take off since independence, though it was once doing better than Malaysia and Singapore. Today, these two countries are doing better. There is no urgency to grow the economy,” he lamented.
He pointed out that Malaysia has never sought an IMF bailout, but Ghana has gone to the IMF 17 times for support.
“Ghana has spent as much money as Singapore and Malaysia for development but still lags significantly behind. These countries [Singapore and Malaysia] have used fiscal policy to drive economic growth, but Ghana has failed to do so,” he said.
Excessive Borrowing Was Ghana’s Major Problem – Joe Jackson
For his part, the Chief Executive Officer of Dalex Finance, Joe Jackson, blamed the previous government for its excessive borrowing, saying it almost collapsed the Ghanaian economy.
“Our woes were triggered by over-borrowing. It was sad for the government to spend 47% of its tax revenue to service debt. The public debt was GH¢291 billion in 2020, approximately 76.1% of GDP, and the interest-to-revenue ratio was 47%. That was how bad the situation was,” he said.
He continued that Ghana’s exchange rate problems are due to the large interest payments to external investors and, to some extent, the repatriation of dividends to foreign investors.
“Our problem in terms of exchange rate depreciation is not about our trade balance, because we have been recording a trade surplus for some time now. Stop harassing GUTA [Ghana Union of Traders Association] for that. The problem is the money we send out there to service our debt. It is also the repatriation of dividends to external shareholders,” he added.
Opening the programme, the President of CANCHAM, Linda Vasinani, urged businesses to show more interest in the performance of the economy to enable them to plan well and navigate the challenges.
The session provided an in-depth analysis of the 2025 Budget Statement, the future of the IMF-support programme, and the implications of the budget on the private sector.