Economist and Pentecost University Lecturer Dr. Alexander Baffour Amo has expressed confidence in government’s assertion that Ghana may not require another bailout from the International Monetary Fund if the current trajectory of fiscal discipline and economic stability is sustained.
According to Dr. Amo, President John Dramani Mahama’s declaration that Ghana would not return to the IMF should be viewed within the context of the administration’s understanding of the country’s prevailing economic conditions and the deliberate reforms being implemented to prevent a repeat of past fiscal crises.
Speaking on the country’s economic outlook, Dr. Amo noted that Ghana’s repeated dependence on IMF support over the years was largely driven by reckless public spending, weak financial management, and unsustainable borrowing patterns by previous administrations.
He explained that the current government appears determined to reverse that trend through prudent economic management, tighter fiscal controls, and structural reforms aimed at ensuring long-term economic resilience.
“One of the major steps taken by this administration is the passage of the Value for Money Act Bill, which is intended to curb wasteful expenditure, prevent inflated contracts, and strengthen accountability in the management of public resources,” he stated.
Dr. Amo argued that signs of macroeconomic stability are gradually emerging within the economy, citing the decline in inflation and the relative stability of prices in local markets as indicators that the economic environment is becoming more predictable for businesses and consumers.
He explained that single-digit inflation creates confidence within the market system because it increases the likelihood of stable prices over a longer period, thereby reducing uncertainty for households and traders.
According to him, the government’s broader strategy is focused on ensuring that the economic conditions that previously pushed Ghana to the IMF do not reoccur.
He further disclosed that Ghana’s debt-to-GDP ratio, which stood at approximately 61.8 percent in 2024, has reportedly declined significantly to about 45.3 percent in 2025 due to what he described as disciplined fiscal management and deliberate debt restructuring efforts.
Dr. Amo noted that borrowing costs have also reduced considerably, creating a more favourable environment for businesses and investors.
He added that contractors working on road projects are now being paid consistently while projects are ongoing, unlike previous years when many contractors experienced prolonged delays in payments.
“The economy we inherited was unstable, inflation was rising uncontrollably, and the exchange rate situation was worrying. But today, there is greater stability in the system, interest rates have reduced, and the cedi has become relatively stable against the dollar,” he stressed.
He observed that the improving exchange rate has brought some relief to importers and businesses that depend heavily on foreign exchange transactions, while lower interest rates are expected to encourage business expansion, increase productivity, and create more employment opportunities.
Dr. Amo therefore called on Ghanaians to support the economic policies and recovery agenda of President Mahama’s administration to consolidate the gains achieved so far.
However, his remarks come at a time when a newly released study by Smart Sarpong of Kumasi Technical University has highlighted the severe financial pressures still confronting many Ghanaian workers despite signs of macroeconomic improvement.
The National Cost of Living Outlook Report for the first quarter of 2026 revealed that only 32.2 percent of salaried workers in Ghana are able to save, while 67.8 percent say their expenditure exceeds their income.
The comprehensive study, which surveyed 4,155 households across 2,350 communities in eight regions and 100 constituencies, attributed the low savings culture largely to poor salaries, especially within the private sector.
According to the report, about 95 percent of workers earn below GH₵5,000 monthly, while more than 36 percent receive less than GH₵1,000 each month.
The findings further showed a stark disparity between public and private sector earnings. While only 6.6 percent of public sector employees earn below GH₵1,000 monthly, the figure rises sharply to 15.8 percent among private sector workers.
Additionally, 58 percent of private sector workers reportedly earn below GH₵2,000 compared to 19.7 percent in the public sector.
The report also painted a worrying picture regarding living conditions in the country, noting that only 14.4 percent of Ghanaians currently perceive the cost of living to be low — a significant decline from 68.8 percent recorded in 2025.
Electricity tariffs, transportation costs, mobile call credit, and internet services were identified among the major contributors to the rising cost of living pressures facing households.
Despite these concerns, Dr. Amo maintains that Ghana’s economic fundamentals are gradually improving and believes sustained fiscal discipline, reduced borrowing, and strategic policy implementation could eventually free the country from future dependence on IMF support.
Story by Freedom Etsey Lavoe/Ahotoronline.com
