The International Monetary Fund (IMF) has pointed to structural fiscal reforms, particularly the strengthened Fiscal Responsibility Act and plans for an independent fiscal council, as key factors behind Ghana’s economic stability in 2025, with the Fund’s Resident Representative describing the year as a rare bright spot in the country’s recent economic history.
Dr. Adrian Alter, IMF Economist and Resident Representative in Ghana, stated that policy changes in 2025 have strengthened the foundation of Ghana’s economy, especially on the fiscal side, during an interview on Joy News’ PM Express Business Edition on Thursday, January 15, 2026. According to Alter, while there were many reforms, one key reform stands out as the improvement to the fiscal responsibility framework.
At the center of that effort is the Fiscal Responsibility Act. According to Alter, the updated framework tightens fiscal rules and signals a stronger commitment to discipline, not just promises. He explained that the fiscal responsibility act basically adds to fiscal rules, creating mechanisms that go beyond rhetorical commitments to establish enforceable standards for fiscal management. One proposal stands out among the reforms, which is the planned creation of an independent fiscal council.
Alter described the move as a structural shift that could fundamentally change how government spending is monitored and debated in Ghana. An independent body, he said, adds credibility and reduces the temptation to bend rules under political pressure. The council would operate separately from both the executive branch and parliament, providing objective analysis of fiscal policies and monitoring compliance with established fiscal targets.
Alter also linked reform credibility to broader macroeconomic stability. He stated that stronger rules work best when paired with disciplined monetary policy and responsible fiscal management, both of which shaped the IMF’s outlook on Ghana’s economic performance. He noted that the fiscal discipline helped to put the public finances in order, creating conditions for improved economic indicators across multiple dimensions.
The IMF does not hand out praise easily, making its latest view on Ghana particularly noteworthy. Speaking on the same PM Express Business Edition program, Alter described 2025 as a solid year for the Ghanaian economy, noting that the Fund’s conservative nature makes the assessment even more meaningful. He stated that the IMF typically is conservative in their assessment and projections, adding that they usually want to be surprised to the upside when it comes to growth.
That surprise, he suggested, may already be unfolding. Alter pointed to fiscal discipline as a major factor behind the improved outlook. According to him, tighter controls on public spending have helped restore order to government finances after years of strain. He emphasized that overall, he would say 2025 has been a very good year, a characterization that reflects substantial improvement from the economic difficulties that preceded the current IMF programme.
Alter also highlighted the role of monetary policy in the turnaround. The Bank of Ghana’s (BoG) tight stance, combined with steady reserve accumulation, has helped rebuild confidence, especially among investors watching the country closely. He noted that the tight monetary policy and the accumulation of reserves by the Bank of Ghana helped with credibility, reinforcing the impact of fiscal reforms through coordinated macroeconomic management.
Speaking on the same Joy News programme, Alter agreed with concerns that the frequency of IMF programmes in Ghana raises questions about policy credibility and the durability of past reforms. He acknowledged this by stating simply that he agreed with such concerns. However, Alter pointed to safeguards built into Ghana’s fiscal framework as critical tools for rebuilding confidence and preventing a repeat of past slippages.
Alter stated that with the measures that were put in place, the checks and balances on the Fiscal Responsibility Act and the implementation of the independent Fiscal Council will eventually lead to more checks and balances for how the public money is spent. According to him, these mechanisms are designed not only to restrain fiscal excesses but also to rebuild public trust over time. He added that these reforms will eventually lead to more trust in the public institutions and the government.
The IMF Executive Board completed the fifth review of Ghana’s Extended Credit Facility (ECF) arrangement on December 17, 2025, categorizing the country’s overall performance as generally satisfactory. Alter confirmed that Ghana’s programme remains solid and on track with the fifth review being completed, and disbursement being done at the end of December. He disclosed that total disbursements under the ECF programme had now reached about 2.8 billion dollars.
Alter stated that all indicative and performance criteria targets have been met, demonstrating compliance with programmatic benchmarks across multiple policy areas. He pointed to decisive actions taken by the authorities after fiscal slippages in 2024, stressing that these corrections changed the economy’s trajectory in 2025. The authorities implemented strong corrective actions in the aftermath of the 2024 fiscal slippages, he said, adding that the 2025 macroeconomic outcomes have been better than expected.
According to the IMF Resident Representative, several key indicators outperformed projections simultaneously. Inflation came down faster than expected, he noted. Growth exceeded expectations. Reserves have improved. The currency appreciated and stabilized. He emphasized that the simultaneous improvement across multiple indicators was significant, stating that there are many macroeconomic indicators that perform very well at the same time.
Alter also highlighted progress on Ghana’s debt restructuring, describing it as advanced, even as broader reforms continued to take hold. The debt restructuring process, which involved negotiations with external creditors and domestic bondholders, has been a central component of Ghana’s economic recovery strategy alongside fiscal consolidation and structural reforms.
Inflation declined for eleven consecutive months through December 2025, falling from 23.8 percent to 6.3 percent. The Ghana cedi appreciated cumulatively by over 35 percent against the U.S. dollar during 2025, marking the first time the currency appreciated since 2007. These achievements contributed to Alter’s assessment that 2025 was a very good year despite initial uncertainties.
However, the IMF has emphasized that maintaining these gains requires continued discipline. Alter stated that after coming from debt restructuring and all the fiscal slippages that happened in 2024, fiscal discipline is extremely important. Given limited resources and the target of a 1.5 percent primary surplus, the government will need to prioritize projects, make spending more efficient, and at the same time protect vulnerable groups.
Alter noted that Ghana’s fiscal consolidation drive must go hand in hand with stronger domestic revenue mobilization. He pointed to an ongoing comprehensive Value Added Tax (VAT) reform as a key step toward broadening the tax base and simplifying the system to improve compliance and revenue performance. Tax reforms represent critical complements to expenditure discipline, enabling Ghana to meet fiscal targets without unsustainable spending cuts.
Despite calls for tighter fiscal controls, the IMF maintains that social protection must remain central to Ghana’s economic strategy. Alter highlighted key programs including the Livelihood Empowerment Against Poverty (LEAP) initiative, the Ghana School Feeding Programme, and the National Health Insurance Scheme (NHIS) as essential safety nets that should not be compromised. This emphasis on protecting vulnerable groups reflects recognition that fiscal consolidation must be socially sustainable to maintain political support.
The independent fiscal council represents a structural innovation aimed at breaking cycles of fiscal slippage that have plagued Ghana’s economic management. While fiscal rules have existed in various forms under previous frameworks, enforcement has proven challenging, particularly during election years when political pressures encourage spending increases. An independent council with mandate to assess fiscal policy and publicly report on compliance could create reputational costs for governments that violate established rules.
Earlier, at a policy dialogue organized by IMANI Africa and the International Institute for Sustainable Development in October 2025, Alter emphasized that while fiscal rules appear effective in theory, enforcement remains the critical weakness across Sub Saharan Africa. He explained that rules alone do not deliver discipline, highlighting that successful implementation depends on reliable data collection and comprehensive debt monitoring systems. The IMF official stressed that Ghana must prepare for enforcement challenges as it works to strengthen public financial management.
The international lender’s support will extend beyond rule design to include capacity building for institutions responsible for gathering and managing fiscal data. This technical assistance aims to ensure policymakers have complete information before making spending decisions. Without accurate, timely data on revenue collection, expenditure commitments, and debt obligations, fiscal councils cannot effectively monitor compliance or provide credible analysis.
Ghana’s establishment of such an oversight body comes as the country seeks to rebuild fiscal credibility following years of budget pressures. The independent council would mark a significant step toward institutionalizing fiscal discipline and transparency in government financial management. The announcement positions Ghana among African countries exploring independent fiscal institutions as mechanisms for enhancing economic governance and maintaining sustainable public finances.
International experience with independent fiscal councils offers mixed lessons. Successful examples include the Office for Budget Responsibility in the United Kingdom, which has established credibility through rigorous analysis and willingness to challenge government assumptions. Less successful cases demonstrate that formal independence alone proves insufficient if councils lack resources, technical capacity, or political protection from interference.
For Ghana’s planned fiscal council to succeed, several conditions must be met. Legal independence must be protected through legislation that cannot be easily amended, ensuring the council operates free from political pressure. Adequate funding independent of annual budget negotiations provides operational autonomy. Access to comprehensive fiscal data enables thorough analysis of government finances. Authority to publish findings and recommendations creates accountability through transparency. Credible leadership with technical expertise and integrity establishes the institution’s reputation.
The composition and mandate of Ghana’s fiscal council remain under development. Key design questions include whether the council will have authority only to assess compliance with fiscal rules or broader mandate to recommend policy changes, whether it will produce binding assessments or advisory opinions, how many members will serve and how they will be appointed, what professional qualifications and expertise requirements will apply, and what resources and staff support the council will receive.
The timing of the council’s establishment carries significance as Ghana approaches the scheduled completion of its IMF programme in May 2026. Creating institutional safeguards before the Fund’s formal oversight ends could help sustain discipline during the transition. However, establishing effective institutions takes time, and rushing implementation risks creating structures that look credible on paper but lack operational capacity.
Public reactions to the fiscal council proposal have been mixed. Some observers praise the initiative as essential institutional infrastructure that Ghana should have implemented decades ago, viewing independent oversight as long overdue given repeated fiscal crises. Others express skepticism about whether genuine independence can be maintained in Ghana’s political environment, questioning whether governments will truly accept constraints on their fiscal discretion or instead find ways to circumvent or discredit inconvenient council assessments.
Civil society organizations have generally supported the fiscal council concept while emphasizing the importance of design details. Organizations including IMANI Africa, ISODEC, and the Institute for Fiscal Studies have called for robust legal protections, transparent appointment processes for council members, and provisions enabling civil society input into council operations. These groups argue that public engagement strengthens accountability and reduces risks of capture.
The business community has welcomed improved fiscal discipline, viewing it as essential for economic stability and investor confidence. Ghana Union of Traders Associations, the Association of Ghana Industries, and the Ghana National Chamber of Commerce have all endorsed fiscal reforms while emphasizing the need for predictable policy environments that enable long term planning. Business groups particularly value reductions in inflation and exchange rate volatility achieved during 2025.
As Ghana implements fiscal reforms and prepares to establish its independent fiscal council, the ultimate test will be political sustainability. Can elected governments accept meaningful constraints on their fiscal discretion, particularly during election periods when pressures to increase spending intensify? Will opposition parties support institutional mechanisms that limit their own freedom when they assume power? Can fiscal discipline be maintained without the external enforcement provided by IMF programme conditionality?
The answers to these questions will determine whether Ghana’s current fiscal improvements represent temporary stabilization or sustainable transformation. The IMF’s assessment that 2025 was a very good year provides encouraging evidence that disciplined policies can produce rapid improvements. Whether those improvements endure beyond the current IMF programme depends substantially on institutional innovations like the independent fiscal council becoming embedded in Ghana’s political economy rather than remaining formal structures easily bypassed under pressure.
For now, the IMF’s optimistic assessment offers validation of Ghana’s reform efforts while highlighting the structural changes, particularly the fiscal council, as critical to sustaining progress. As the country transitions from crisis management to consolidation, the credibility of its fiscal institutions will increasingly determine economic outcomes and investor confidence.
