By Love Wilhelmina Abanonave
As Ghana exits its latest International Monetary Fund programme, economists are cautioning that the country’s next phase of economic management must move beyond spending cuts if the gains are to hold.
Professor of Finance at the University of Ghana Business School, Prof. Godfred Bokpin said relying mainly on expenditure cuts to achieve fiscal consolidation carries long-term risks.
“If we rely primarily on the expenditure cut in fiscal consolidation, it will come back to bite us,” Bokpin said.
Fiscal consolidation through reduced government spending has been a central feature of Ghana’s IMF-supported programmes. The approach helps narrow deficits quickly and reassures lenders, however Prof. Bokpin warned on GBC’s Talking Point that, it often undermines growth and public services when used in isolation.
Heavy reliance on cuts can delay infrastructure projects, strain social programmes, and weaken the state’s capacity to deliver services, he said. Over time, that can drag on economic activity and reduce the tax base, making the fiscal position harder to sustain.
Prof. Bokpin argued that the priority now should be to widen and deepen domestic revenue collection.
“We need to intensify reforms in our domestic revenue mobilization,” he said.
That includes improving tax administration, closing loopholes, expanding the tax net to the informal sector, and reducing reliance on volatile commodity revenues. Stronger revenue performance would give the government fiscal space to invest in growth-enhancing areas without returning to high borrowing.
Ghana concluded its 17th IMF programme in 2026 after implementing measures aimed at restoring macroeconomic stability, including debt restructuring, spending restraint, and structural challenges.
But analysts say the exit from the programme does not remove the underlying structural challenges. Without sustained revenue reforms, the country risks sliding back into fiscal stress and renewed dependence on external support.
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