By Grace Zigah
The International Monetary Fund (IMF) has hinted at a potential revision of Ghana’s economic programme targets following the unexpected and sharp appreciation of the Ghanaian cedi against the US dollar in the first half of 2025.
The development, while largely viewed as positive, may require adjustments to keep the IMF-supported programme aligned with current economic realities.
Julie Kozack, the IMF’s Director of Communications, disclosed during a press briefing in Washington D.C. that the ongoing reviews of Ghana’s Extended Credit Facility (ECF) programme will consider the cedi’s performance alongside broader macroeconomic developments.
“As we look at the programme, we look at all of these developments, including, of course, developments in the exchange rate,” Kozack stated in response to a question from Joy Business.
She emphasized that the evolving financial conditions—including the cedi’s rise—must be factored into programme assessments to ensure continued feasibility of the set targets.
Programme Objectives
Ghana entered the $3 billion IMF programme in May 2023 after experiencing severe macroeconomic imbalances, currency depreciation, soaring inflation, and unsustainable debt levels.
The three-year programme focuses on: Restoring macroeconomic stability, ensuring debt sustainability, and laying the foundation for inclusive and resilient growth.
One critical target is to reduce Ghana’s public debt to a sustainable level—specifically, bringing the debt-to-GDP ratio down to 55% by the end of 2028.
However, new data suggest Ghana has already hit that benchmark much earlier than expected.
According to the Bank of Ghana, as of the end of April 2025, the debt-to-GDP ratio has dropped to 55%, largely due to the rapid appreciation of the cedi since January.
Commercial bank data indicates that the local currency has strengthened by more than 40% against the US dollar this year alone.
The cedi is currently trading at GH¢10.26 to the dollar—its strongest level in over three years.
President John Mahama, speaking at an African Development Bank (AfDB) forum in Côte d’Ivoire, attributed a GH¢150 billion reduction in Ghana’s total debt stock to the cedi’s recent strength.
In a follow-up address, the President noted that the real exchange rate value of the cedi was now stabilizing within the GH¢10 to GH¢12 range per dollar.
In addition to the debt milestone, Ghana has also surpassed IMF targets for international reserves.
Figures from the Bank of Ghana show that by end-April 2025, the country’s gross international reserves stood at GH¢10.6 billion—equivalent to 4.7 months of import cover, significantly above the programme’s requirement.
IMF Response and Next Steps
While these developments are encouraging, the IMF insists that they warrant a deeper review.
Julie Kozack indicated that the IMF Board will convene in early July 2025 to assess Ghana’s progress.
If approved, Ghana is expected to receive another disbursement of $370 million, bringing total support under the programme to $2.4 billion since its inception.
She explained, “The Executive Board meeting will give us the opportunity to evaluate all progress under the programme, including unexpected developments like the currency appreciation.”
Though IMF support continues through to May 2026, President Mahama recently stated that Ghana will not seek an extension beyond the programme’s original duration.
The decision signals confidence in Ghana’s ability to manage its economic recovery independently beyond the IMF’s timeline.
Implications Moving Forward
The cedi’s appreciation, while aiding fiscal and debt metrics, also poses challenges.
A stronger currency can affect export competitiveness and complicate inflation targeting.
Nonetheless, the unexpected performance has provided much-needed breathing room for the government and the central bank.
