From crisis to credibility: Market trust tested at IMF spring meetings

By Joshua Worlasi AMLANU, Washington D.C
[email protected]/ [email protected]

The government is using the platform of the IMF and World Bank Spring Meetings to test whether recent macroeconomic gains can translate into sustained investor confidence, as improved fiscal metrics, strong programme performance, and a return to the domestic bond market signal a shift from crisis management to credibility-building.

Finance Minister Cassiel Ato Forson told policymakers and investors that the country’s recovery reflects deliberate policy choices anchored in fiscal consolidation and institutional reform, positioning Ghana to re-engage capital markets after a period of debt restructuring and macroeconomic instability.

The most immediate market signal of that transition is Ghana’s re-entry into the domestic bond market after a three-year hiatus. The government raised GH¢2.7 billion through a seven-year bond at a yield of 12.5 percent, attracting GH¢3.1 billion in bids. The oversubscription points to improving investor sentiment following two years of restructuring and fiscal adjustment.

The issuance forms part of a broader strategy to rebuild the domestic yield curve and manage refinancing risks ahead of a concentration of debt maturities in 2027 and 2028. Under the Medium-Term Debt Management Strategy (2025–2028), authorities are prioritising longer-dated instruments to extend maturities and smooth repayment obligations. The approach reflects a transition from short-term crisis financing toward a more structured and predictable debt profile.

The Minister framed the recovery as the outcome of policy discipline introduced after the economic disruptions of 2022 and 2023. “We faced severe challenges in 2022 and 2023,” he said, adding that the government responded with “bold policy measures and sustained reforms to rebuild the fundamentals of the economy.”

Macroeconomic indicators point to a broad-based stabilisation. Real GDP growth reached 6 percent in 2025, up from 5.8 percent in 2024. Inflation declined sharply from 23.8 percent in 2024 to 5.8 percent in 2025, and further to 3.2 percent as of March 2026. The Ghana cedi appreciated by more than 40 percent against the US dollar in 2025, with gains extending into 2026.

Fiscal metrics have also improved significantly. The primary balance shifted from a deficit of 2.9 percent of GDP to a surplus of 2.6 percent in 2025, while the debt-to-GDP ratio declined to 45.3 percent at end-2025 from 61.8 percent. International reserves strengthened to cover 5.8 months of imports, providing a buffer against external shocks.

Ghana’s performance under its IMF-supported programme reinforces these gains. The Executive Board of the International Monetary Fund, following the completion of the fifth review of the US$3 billion Extended Credit Facility arrangement in December 2025, assessed programme implementation as generally satisfactory. All quantitative performance criteria and indicative targets for the review were met, alongside progress on structural reforms despite some delays.

Completion of the review triggered an immediate disbursement of about US$385 million, bringing total disbursements under the programme to approximately US$2.8 billion. The continued flow of programme financing has supported fiscal operations, reserve accumulation, and policy credibility.

Deputy Managing Director Bo Li said, at the time that, Ghana’s authorities had demonstrated strong programme ownership by implementing corrective actions following policy slippages in 2024. “These efforts, coupled with structural reforms, have driven a stronger-than-anticipated recovery in growth, brought inflation within the Bank of Ghana’s target range, and supported robust reserve accumulation,” he said.

The IMF assessment reinforces the government’s narrative that recent macroeconomic improvements are policy-driven rather than cyclical. It also provides external validation at a time when Ghana is seeking to re-anchor investor confidence and deepen market access.
The county has also made progress on public debt restructuring, a central pillar of its recovery strategy. Authorities have signed bilateral debt relief agreements with several members of the Official Creditor Committee and concluded Agreements in Principle with other external commercial creditors. Engagement with remaining creditors is ongoing, with the aim of achieving restructuring terms consistent with programme parameters and comparability of treatment.

The finance minister has linked these developments to broader efforts to institutionalise fiscal discipline. He said improved outcomes reflect “disciplined fiscal management” and a commitment to rules-based policy frameworks designed to ensure medium-term sustainability.

The decline in domestic yields has created a more favourable financing environment. Yields have fallen from crisis-era levels of nearly 28 percent to below 10 percent, on the short-term bills, allowing the government to re-enter the market at lower cost. Each longer-tenor issuance reduces near-term rollover risk by redistributing debt service obligations over a longer horizon.

Alongside market re-entry, the government is advancing legal reforms aimed at strengthening fiscal governance. A proposed Loans Act seeks to restrict borrowing to projects with clear economic returns, addressing weaknesses exposed during the pre-crisis period when debt accumulation outpaced growth outcomes.
“We are anchoring our policies in credible institutions and clear fiscal rules,” Dr. Forson said. “This is essential to ensure that the gains we have made are sustained over the medium term.”

The IMF has underscored the importance of maintaining this policy trajectory. It noted that staying the course on fiscal adjustment, while creating room for social spending, will be critical to reducing financing needs and placing public finances on a sustainable path. Strengthening domestic revenue mobilisation, improving expenditure control, and enhancing state-owned enterprise governance were highlighted as key priorities.

The central bank’s role has also been central to the stabilisation effort. The IMF noted that the Bank of Ghana has brought inflation within its target range and rebuilt reserve buffers, while cautiously easing monetary policy. However, it stressed the need to strengthen central bank independence, discontinue quasi-fiscal activities, and deepen foreign exchange markets.
Financial sector risks remain an area of focus. While progress has been made in implementing bank recapitalisation plans and initiating the recapitalisation of key state-owned banks, vulnerabilities persist. The IMF called for strengthened governance, effective use of the bank resolution framework, and enhanced supervisory strategies to manage credit and operational risks.

At the Spring Meetings in Washington, D.C., development partners have broadly aligned with the IMF’s assessment, signalling growing confidence in Ghana’s reform trajectory. Officials from the World Bank pointed to improving macroeconomic indicators and policy discipline as evidence that reforms are gaining traction.

Regional Vice President for Western and Central Africa Ousmane Diagana described the turnaround as impressive and indicated the Bank’s readiness to deepen support. The endorsement reflects a broader view that Ghana is transitioning from crisis stabilisation to a more complex phase of growth and fiscal consolidation.

World Bank officials emphasised that the recovery reflects sustained policy commitment. Seynabou Sakho said fiscal reforms, particularly in debt restructuring and macroeconomic management, are increasingly being viewed as a reference point within the region.
At the same time, the authorities have maintained social spending despite fiscal tightening. Trina Hague highlighted efforts to sustain social protection programmes as critical to preserving stability during adjustment.

The next phase of Ghana’s strategy is focused on shifting from macroeconomic repair to productivity-driven growth. Authorities have identified agriculture, energy, education, and infrastructure as priority sectors to support inclusive growth and job creation.
However, both the IMF and government officials acknowledge that risks remain. Ghana’s financing outlook is sensitive to global financial conditions. Domestic vulnerabilities also persist. The cocoa sector, a major source of foreign exchange, has recorded declining output for three consecutive years.

The IMF further highlighted structural challenges that could affect medium-term stability, including fiscal risks in the energy sector linked to arrears, the need to strengthen tax administration, and gaps in governance frameworks. It noted that advancing anti-corruption reforms and aligning asset declaration regimes with international best practices will be important for strengthening public trust.

These factors underscore that Ghana’s recovery remains conditional on sustained reform implementation. While macroeconomic stabilisation has been achieved, maintaining credibility will depend on institutionalising fiscal discipline, addressing structural vulnerabilities, and preserving policy consistency.

The return to the domestic bond market provides an early test of that credibility. The oversubscription of the recent issuance suggests improved sentiment, but sustained access will depend on continued policy execution and favourable external conditions.
At the Spring Meetings, Ghana is positioning its recovery narrative within a broader discussion on macroeconomic stability and financing conditions in Sub-Saharan Africa. The country’s experience is being closely watched by policymakers and investors as an example of how crisis-driven reforms can restore stability and reopen market access.

The next phase will determine whether these gains can be consolidated into durable growth. That outcome will hinge on the government’s ability to sustain reform momentum, manage external shocks, and translate policy credibility into long-term investor confidence.

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