On 6 January 2026, President John Dramani Mahama stood before Ghana’s Parliament and made an extraordinary pledge: “This will be our last bailout from the IMF.” The declaration drew thunderous applause from legislators weary of six decades of economic dependency. But in the gallery, there were well-meaning Ghanaians who sat unmoved because this sounded like a rehashed rhetoric, recalling similar promises in 1987, 2001, and 2015, each followed by a return to Washington within a decade.
The pattern is as predictable as it is dispiriting. Ghana has a long history of engagement with the IMF, with successive governments seeking economic bailouts due to worsening domestic macroeconomic stability. Since 1966, when the National Liberation Council overthrew President Nkrumah and promptly invited the IMF in, Ghana has entered 17 programmes. That’s once every 3.5 years on average. The current arrangement, a $3 billion Extended Credit Facility agreed in 2023, represents the latest chapter in this endless cycle of crisis, rescue, temporary stability, and eventual relapse.
Yet the question nobody asks is perhaps the most important: why does Ghana perpetually need bailouts, whilst countries like Indonesia, Poland, and Colombia, once serial IMF borrowers, haven’t touched IMF money in 15 to 21 years? Everyone debates what conditions the IMF imposes. Nobody examines why Ghana’s institutions consistently fail to prevent the crises that necessitate these programmes in the first place.
Mahama’s “last bailout” pledge is achievable, but not through the institutions he’s currently proposing. Breaking IMF dependency requires three transformations Ghana has never attempted: constitutionally mandated fiscal rules enforced by independent institutions, depoliticising monetary policy through genuine central bank independence, and diversifying export revenues beyond cocoa, gold and oil commodity dependence. Without these, Ghana will return to the IMF by 2030, regardless of who governs.
Why Ghana Always Returns: The Institutional Deficit
The academic evidence is unambiguous. IMF bailouts often have short term impact on macroeconomic stability and growth, but the effects are unsustainable in the long term, especially after the IMF programme ends. Ghana’s pattern has become grimly familiar: crisis leads toan IMF programme, which produces temporary stability, followed by electoral spending surges, culminating in fiscal collapse and a fresh crisis.
Four recurring institutional failures drive this cycle. First, fiscal indiscipline reliably resurfaces after IMF exit. Every election year (2008, 2012, 2016, 2020, 2024), government spending surges like clockwork. In the post IMF period of 2017 to 2019, public debt jumped from 57 per cent to 63 per cent of GDP as wage bills exploded, subsidies returned, and capital projects ballooned. The root cause is straightforward: Ghana has no institutional constraints on executive spending power that survive political transitions.
Second, monetisation of deficits remains the government’s escape valve when fiscal discipline proves politically inconvenient. The Bank of Ghana extended 7.2 per cent of GDP in overdraft facilities to the government, with part of the buildup in non-marketable instruments issued to the Bank of Ghana supporting recapitalisation and liquidity assistance to distressed banks during Ghana’s financial sector cleanup. Central bank financing generates inflation, which drives currency depreciation, creates external imbalances, and ultimately necessitates IMF intervention. This cycle repeated in 2000 to 2001, 2008 to 2009, 2013 to 2014, and 2021 to 2022.
Third, commodity revenue volatility exposes Ghana’s fundamental economic fragility. With over 60 per cent of export revenues derived from cocoa, gold, and oil, all subject to volatile international prices, fiscal crises materialise within 12 to 18 months of price declines. Unlike Botswana, Chile, or Norway, Ghana has never saved windfall gains during boom years. Instead, temporary revenue surges are spent immediately, leaving the country defenceless when commodity markets inevitably turn.
Fourth, weak debt management has transformed borrowing into a political tool rather than a development instrument. Ghana opted to undertake both domestic debt restructuring and external debt restructuring in 2022 to 2023, as domestic debt rose to 125.3 per cent of GDP by 2026 under the previous trajectory. The Eurobond binge of 2013 to 2019 saw Ghana borrow $7 billion with remarkably little infrastructure to show for it. The pattern persists: borrow, consume, default, restructure, then borrow again.
The political economy trap is inescapable under current institutional arrangements. IMF-mandated fiscal consolidation targets clash with domestic political pressures to fund development and cushion citizens from inflation. Politicians face irresistible incentives: spend now to win elections, leave the consequences for successors to manage. Without binding institutional constraints that survive changes in government, this cycle cannot end.
The Mahama Plan: Necessary But Insufficient
President Mahama has proposed three institutional innovations intended to break Ghana’s IMF dependency. Each merits examination.
The Value for Money Office, modelled on the UK’s National Audit Office, represents an independent body tasked with reviewing all public spending for efficiency. Scheduled to launch in 2026, it promises enhanced transparency in how Ghana deploys public resources. This is welcome but fundamentally inadequate. The office can identify waste but cannot prevent it. Its recommendations are advisory, not binding. Crucially, the government can ignore its findings, a luxury the UK Parliament does not possess. Transparency without accountability and consequences amounts to documentation of failure, not prevention.
The proposed Fiscal Responsibility Act establishes numerical targets: a debt ceiling of 55 per cent of GDP, a primary surplus target of 1.5 per cent of GDP, and a budget deficit limit of 3 per cent of GDP. In principle, this represents sound fiscal architecture. In practice, Ghana had similar rules in the 2018 Financial Administration Act, which were cheerfully ignored within two years. The current proposal contains no penalty mechanism for violations. More troublingly, it permits the executive to suspend rules during self-declared “emergencies.” Laws without enforcement mechanisms are wishes, not constraints.
The Gold Board initiative, designed to purchase domestic gold to build foreign exchange reserves, has shown early promise. It generated over $10 billion in forex in 2025 alone, bolstering reserves to approximately $12 billion by late 2025, up from $4.86 billion in 2016. This clever mechanism aims to reduce reliance on cocoa export revenues. Yet it remains fundamentally incomplete as a solution. Ghana simply shifts commodity dependence from cocoa to gold rather than ending it. Gold prices prove just as volatile as cocoa. The Gold Board already faces controversy over Bank of Ghana trading losses of $214 million under the Gold for Reserves programme, raising questions about the sustainability of the model. This shifts commodity dependence; it does not end it.
What’s conspicuously absent from Mahama’s proposals? Constitutional fiscal rules that cannot be amended by a simple parliamentary majority. An independent Fiscal Council with binding veto power over non-compliant budgets. Genuine central bank independence that prohibits government financing under all circumstances. Export diversification strategies beyond extractive industries.
How Others Escaped: Indonesia, Poland, Colombia Models
Three countries successfully broke their serial IMF dependency after severe financial crises. Their experiences illuminate what Ghana has persistently failed to build.
Indonesia’s transformation following the devastating 1998 Asian financial crisis offers the clearest blueprint. The country constructed three institutional pillars. The Bank Indonesia Law of 1999 created genuine central bank independence, explicitly prohibiting the central bank from financing government deficits and ensuring the governor cannot be dismissed by the president. The State Finance Law of 2003 established constitutional, not merely statutory, fiscal rules, capping budget deficits at 3 per cent of GDP and public debt at 60 per cent. Critically, these limits were entrenched in the constitution, requiring extraordinary majorities and referendums to amend. Finally, Indonesia empowered its Supreme Audit Institution as a constitutional body with prosecutorial powers, not merely advisory functions.
The results speak eloquently. Indonesia completed its last IMF programme in 2003. For 23 years, it has remained IMF free despite weathering the 2008 global financial crisis, multiple commodity price shocks, and the COVID-19 pandemic. Its debt-to-GDP ratio stands at 38 per cent, comfortably sustainable. It maintains investment-grade credit ratings. The key lesson for Ghana is unambiguous: constitutional entrenchment proves superior to statutory law. Indonesia’s fiscal rules cannot be suspended by executive decree or amended by simple parliamentary vote. Ghana’s proposed Fiscal Responsibility Act can be.
Poland’s post communist transformation demonstrates how export diversification enables fiscal sustainability. In 1990, Poland exported primarily raw materials and agricultural products, over 80 per cent of total exports. By 2010, manufactured goods and services comprised 60 per cent of exports. Poland joined the European Union in 2004, which imposed strict fiscal criteria through the Maastricht rules. Simultaneously, foreign direct investment flowed into export-oriented manufacturing (automobiles, electronics, machinery). Poland integrated into German supply chains, transforming its economic structure.
Poland completed its last IMF loan in 1996. For 30 years, it has navigated multiple global shocks without returning to the IMF. GDP per capita surged from $2,000 in 1990 to $18,000 today. The lesson is stark: commodity exporters cannot escape IMF dependency without export diversification. Poland’s fiscal discipline became sustainable only when revenues stabilised through manufactured exports rather than volatile commodities.
Colombia’s experience highlights the power of counter-cyclical fiscal management. Following its 2005 IMF programme, Colombia established an Oil Stability Fund with a clear mandate: during oil price booms, save 70 per cent of windfall revenues; during busts, draw from the accumulated buffer. The Fiscal Rule of 2011 set structural deficit limits that adjust for commodity price cycles, preventing the boom-bust spending patterns that plague resource exporters. An Independent Fiscal Council reviews budget compliance and publishes binding assessments that constrain executive discretion.
Colombia completed its last IMF programme in 2005. For 21 years, it has remained IMF-free despite the catastrophic oil price collapse of 2014 to 2016, which devastated other oil exporters. The lesson for Ghana is pointed: the country experiences regular cocoa, gold, and oil price booms (2006 to 2008, 2010 to 2012), but spends every cedi immediately. When prices crash, a fiscal crisis follows within 18 months like clockwork. Colombia proves counter-cyclical saving works, but requires institutional discipline that Ghana has never possessed.
These three success stories share four characteristics Ghana conspicuously lacks: constitutional fiscal rules not easily amended, genuinely independent central banks that cannot finance governments under any circumstances, binding enforcement mechanisms rather than advisory reports, and export diversification that reduces commodity dependence.
The Real Exit Blueprint: What Ghana Must Actually Build
If President Mahama is serious about making this the last bailout, here’s the non-negotiable institutional architecture Ghana must construct.
A Constitutional Fiscal Framework must be established between 2026 and 2027. Ghana should amend its constitution to enshrine a debt ceiling of 45 per cent of GDP (lower than Mahama’s proposed 55 per cent target), alongside a budget deficit ceiling of 3 per cent of GDP and a primary surplus floor of 1.5 per cent. The enforcement mechanism must be constitutional: budgets violating these limits should be deemed unconstitutional, subject to Supreme Court invalidation. Why constitutional rather than statutory? The proposed Fiscal Responsibility Act can be suspended by executive decree or amended by simple parliamentary majority, precisely what occurred in 2020. Constitutional rules require a referendum to change, making a violation politically suicidal. This follows Germany’s constitutional “debt brake,” Poland’s convergence criteria, and Colombia’s structural balance rule.
Genuine Central Bank Independence requires immediate amendment of the Bank of Ghana Act. The legislation must prohibit all government financing, zero overdrafts, and zero Treasury bill purchases in the primary market. The governor should serve a single eight-year term, removable only for criminal conduct, and ineligible for reappointment to eliminate political pressure. Monetary Policy Committee members should be appointed by cross-party parliamentary committees, not the president. This is essential because, as evidence demonstrates, the Bank of Ghana’s financing of government drives monetisation of deficits, causing inflation and currency depreciation that triggers external crises. Enforcement must include criminal prosecution for violations, following Indonesia’s model.
An Independent Fiscal Council with binding powers should be established by 2027. This seven-member council should be appointed by the Chief Justice, Auditor General, and Bank of Ghana Governor, with no political appointments permitted. The council must possess three powers: certifying budget compliance with fiscal rules before parliamentary approval, vetoing non-compliant budgets, and publishing quarterly fiscal risk assessments. Members should be removable only by the Supreme Court for misconduct. Why is this necessary? The Value for Money Office has no enforcement power. This Fiscal Council would follow models from the UK’s Office for Budget Responsibility, the Netherlands’ CPB, and Sweden’s Fiscal Policy Council.
A Commodity Revenue Stabilisation Fund must be created between 2027 and 2028. Legislation should mandate that when cocoa, gold, or oil prices exceed their 10 year averages, 60 per cent of windfall revenue flows into a sovereign wealth fund. Withdrawals should be permitted only when prices fall below 10-year averages. An independent board comprising representatives from the Ghana Cocoa Board, Bank of Ghana, Fiscal Council, and two private sector members should manage the fund. The target: build a $5 billion buffer by 2035, following Colombia’s oil fund model.
An Export Transformation Strategy spanning 2026 to 2040 requires honest assessment. Ghana cannot diversify overnight. But measurable targets are achievable: between 2026 and 2030, increase manufacturing exports from 12 per cent to 20 per cent of total exports through cocoa processing, lithium refining byproducts, and light manufacturing. By 2030 to 2035, reach 30 per cent of manufactured exports. By 2035 to 2040, achieve 40 per cent, replicating Poland’s 1990 to 2010 trajectory. Interventions must include Special Economic Zones with reliable electricity from dedicated renewable energy sources, vocational training in manufacturing skills, and regional trade prioritisation through the African Continental Free Trade Area over distant markets.
Ghana’s diplomatic missions must play strategic roles. The Geneva mission should learn from ILO skills development programmes and WTO trade facilitation frameworks. The Brussels mission must study EU industrial policy and negotiate technology transfer partnerships. The Canberra mission can examine Australian mining byproduct processing and vocational training models.
The Uncomfortable Truth
The reality is stark. Securing IMF programmes allows countries to unlock debt restructuring deals but cedes significant policy autonomy, as governments must implement conditions that can exacerbate short-term public hardship. The pain of IMF programmes is real. But the alternative, perpetual dependency, is worse.
President Mahama’s “last bailout” promise appears sincere. But sincerity without institutional transformation is performative politics. Ghana had similar declarations in 2001 (“Ghana Beyond Aid”), 2017 (“Ghana Must Work Again”), all preceded by IMF returns within a decade.
What’s different this time, if anything? The Value for Money Office is a start. But without constitutional fiscal rules, independent central bank reform, and export diversification, Ghana will face the same crisis in 2028 to 2030 when commodity prices fall or electoral spending surges.
Ghana can build institutions that constrain executive power, politically painful but economically liberating. Or Ghana can maintain flexibility for elected officials, politically comfortable but fiscally catastrophic.
The last bailout is possible. But it requires Ghana’s political class to do what it has never done: surrender short-term spending power for long-term fiscal sovereignty. Every president since Nkrumah has chosen spending over institutional constraint. Mahama has 48 months to prove he’s different.
The institutions he builds, or doesn’t, will determine whether 2026 is genuinely the last bailout or merely the latest in an unbroken 60-year pattern. Ghana’s future hinges not on presidential promises but on constitutional constraints, independent oversight, and economic transformation. Without these, the next crisis is merely a matter of time.
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Dominic Senayah is an international relations researcher and policy analyst specialising in trade policy, economic development, and institutional reform.
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