The International Monetary Fund (IMF) has cautioned that Ghana has limited fiscal space for additional external borrowing, urging the government to exercise prudence in contracting new loans while prioritising highly concessional financing to support the country’s development agenda.
The warning is contained in the IMF’s latest Article IV Consultation report on Ghana, which noted that although the country’s debt outlook has improved following recent restructuring efforts, significant vulnerabilities remain, requiring careful management of future borrowing.
According to the report, “External borrowing should be anchored in prudent space assessment and strong institutional safeguards.”
The IMF stated that its Debt Sustainability Analysis (DSA) showed Ghana’s room for additional external borrowing remained constrained.
“The DSA suggests that, under conservative assumptions on non-resident participation, Ghana has limited space for new external borrowing, about US$1.2 to 1.3 billion in present value terms per year,” the report said.
It explained that while Ghana continues to face substantial development financing needs, future borrowing should be on favourable terms.
“Given large development needs, new borrowing should be highly concessional to allow for larger nominal borrowing envelopes under the present value debt ceiling,” the fund added.
The IMF’s caution comes despite improvements in Ghana’s public debt profile following the country’s debt restructuring programme.
According to the report, Ghana has made considerable progress in restructuring both domestic and external debt.
“As of June 2026, debt relief agreements consistent with the Official Creditor Committee (OCC) under the G20 Common Framework have been signed with more than half of bilateral creditors,” it noted.
The report further indicated that after the 2024 Eurobond exchange, the government continued negotiations with external commercial creditors and had reached agreements in principle with more than half of them.
The fund also acknowledged improvements in Ghana’s debt sustainability assessment.
“Sustained improvement in the debt trajectory warrants upgrading Ghana’s DSA rating from high to moderate risk of debt distress,” the report stated.
However, the IMF stressed that the improvement should not be interpreted as the end of Ghana’s debt challenges.
“Despite progress, debt vulnerabilities remain elevated and require continued vigilance,” it warned.
According to the report, Ghana’s economy remains vulnerable to external shocks because of its dependence on commodity exports, particularly gold.
“The DSA highlights that debt dynamics remain sensitive to external shocks given Ghana’s reliance on gold and other commodity exports,” the IMF observed.
It further cautioned that adverse developments in export earnings and commodity prices could quickly reverse the country’s recent gains.
“Stress tests show that adverse export and commodity price shocks could push both solvency and liquidity indicators above their thresholds for a prolonged period,” the report noted.
The IMF also identified exchange rate fluctuations as another significant source of risk because of Ghana’s large stock of foreign currency-denominated debt.
“The exchange rate remains a key transmission channel, given the substantial share of FX-denominated external debt and non-resident holdings of domestic debt,” it said.
In addition, the fund warned that contingent liabilities continue to pose downside risks to Ghana’s fiscal outlook.
“Contingent liabilities represent another key source of downside risk: fiscal risks from the energy sector, financial sector recapitalization needs, and quasi-fiscal activities remain particularly salient,” the report stated.
To safeguard recent gains, the IMF recommended the continuation of fiscal reforms, stronger sectoral reforms, adequate external buffers and exchange rate flexibility.
The fund also urged the government to conclude outstanding debt restructuring negotiations.
“Completing restructuring negotiations with residual external commercial creditors and signing the remaining bilateral agreements also remain a priority,” it said.
While acknowledging Ghana’s progress in restoring macroeconomic stability, the IMF maintained that prudent borrowing and disciplined fiscal management would be essential to ensuring that the country’s debt remains sustainable and that future economic shocks do not undermine the recovery.
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