The International Monetary Fund (IMF) says Ghana can adopt a more flexible fiscal path from 2027, allowing increased development spending while remaining on course to meet its long-term debt reduction targets.

In its latest Article IV Consultation and proposed Policy Coordination Instrument (PCI) report, the Fund said improvements in Ghana’s debt position and macroeconomic stability provide room to slow the pace of fiscal consolidation.

The IMF said the revised approach would create additional space for investment in priority sectors while maintaining Ghana’s commitment to reducing public debt.

According to the report, Ghana’s primary fiscal surplus target could be reduced from 1.5% of Gross Domestic Product (GDP) to 0.5% from 2027 without undermining the country’s target of reducing public debt to 45% of GDP by 2034.

However, the Fund said the adjustment would depend on continued implementation of structural reforms to strengthen revenue mobilisation, public financial management and oversight of state-owned enterprises.

"The lowering of the fiscal primary surplus will be supported by an ambitious package of fiscal structural reforms to contain quasi-fiscal pressures and safeguard debt sustainability," the report stated.

The IMF said Ghana faces significant financing needs to achieve the Sustainable Development Goals, estimating that the country would need to spend more than 16% of GDP by 2030 on areas such as education, healthcare and infrastructure.

It said increased investment in labour-intensive sectors, including agriculture and energy, could attract private sector participation, improve value addition and create employment opportunities, particularly for young people.

Under the proposed PCI, Ghana is expected to increase primary spending from 2027, with greater emphasis on capital expenditure, while pursuing additional revenue through tax reforms and improved compliance.

The Fund said Ghanaian authorities agreed that the more relaxed fiscal stance was justified by improvements in debt dynamics and ongoing reforms.

"The authorities viewed the more relaxed fiscal stance as justified by strong policy action and sustained improvement in debt dynamics," the IMF said.

The government indicated that the additional fiscal space would be directed towards priority development programmes and job creation while maintaining commitment to fiscal reforms.

The IMF noted that Ghana’s approved 2026 budget target of a 1.5% primary surplus remains consistent with current programme objectives, but the lower target from 2027 would provide room for growth-enhancing expenditure.