No More Referee-Six Tests for Ghana’s Economic Reset
Julien Ayippey, Head of Research, Analytics and Strategy at First National Bank
In November 2025, this column asked whether Ghana’s 2026 Budget would live up to its promised “reset,” and concluded that the intentions were sound, but execution would be the true test. Eight months on, the scorecard reads better than most predicted.
The Head of Research at First National Bank, Julien Ayippey asserts that the cedi has held broadly stable. He explained further that this has been made possible as the IMF-supported programme has concluded successfully. The domestic bond market has reopened after a three-year absence. Public debt has stayed contained, and the Sinking Fund, whose absence we flagged last year, is now operational, funded by 7% of gross non-oil tax revenue and foreign-currency dividends. “Holding the line on spending amid real infrastructure, social and political pressure is itself an achievement worth recognising.”
He mentioned that sceptics will call this restraint rather than transformation. That debate is legitimate, but discipline must survive the political cycle, and better headline numbers must become better jobs and living standards. Today, the Finance Minister presents the Mid-Year Budget Review to Parliament. Julien themes out some critical questions on whether Ghana can sustain stability without the IMF as referee and whether households facing rising transport, rent and school-fee costs will feel it. He describes six issues that should frame this mid-year review.
The inflation turn
Inflation fell from 23.5% in January 2025 to 3.2% in March 2026, a low last seen in 1985, then reversed for three straight months to 5.3% in June, driven by transport, rents and school fees. Non-food items now make up 68.5% of the basket’s inflation, with services rising 9.4%. Renewed U.S.–Iran tension in the Strait of Hormuz has pushed Brent crude back above US$89 after easing to US$84 in June, and Ghana imports almost all its refined fuel.
The Bank of Ghana has held its policy rate at 14% since May. June’s 5.3% still sits inside the Budget’s 8% end-year target, but the direction and pace deserve a straight answer, “What is the current assumption for fuel prices, and what shields the Budget if the conflict persists”? An open forecast revision beats a quiet one. Credibility depends on candour here.
Figure 1: Headline inflation, year-on-year. The March low of 3.2% is behind us.
Show the plan for the 2027–28 debt wall
Ghana faces roughly GH¢50.3 billion in domestic debt maturities in 2027 and GH¢45.8 billion in 2028, alongside US$1 billion in Eurobond repayments in 2026 and US$2 billion in 2027, fixed dates that will not move. The good news: it has rarely been cheaper to prepare. The 91-day Treasury bill has fallen from 28.4% in January 2025 to about 5.9% today, and April’s post-default seven-year bond raised GH¢2.7 billion at 12.5%. The plan to raise GH¢20.2 billion in seven-to-ten-year paper by year-end is the right instinct, a functioning yield curve is also a pricing benchmark for corporate paper, and First National Bank stands ready to support issuers and investors accessing it. What we need on today is disclosure on:
— The current balance in the revived Sinking Fund, and the specific flows feeding it.
— Progress against the GH¢20.2 billion target at the halfway mark.
— A quarterly bond issuance calendar, requested since November and still overdue.
Recent T-bill auctions have undershot, and yields are drifting up weekly. A published calendar remains the cheapest confidence-building tool the Ministry has.
Name what replaces the IMF’s discipline
Completing the Extended Credit Facility is a genuine milestone, and the shift to the Fund’s Policy Coordination Instrument, monitoring without money, is a sensible bridge. Ghana’s fiscal discipline however, has been historically held under supervision and slipped without it, and an election cycle is now the real test. The review should confirm the primary balance at half-year against the 1.5%-of-GDP target (1.2% through March), and whether revenue is tracking the GH¢268 billion goal. The single most important promise in this Budget is zero central bank financing in 2026; a clean half-year confirmation would outweigh any speech.
Turn cheap money into jobs, not just cheap borrowing
Lower rates are already moving the banking system. Private-sector credit grew 41.2% year-on-year to about GH¢119.6 billion by June, 34% in real terms, while non-performing loans fell from 23.1% to 16.1%. With the policy rate down from 28% to 14%, conditions for a genuine lending cycle exist for the first time in five years. But credit growth is not living standards. The review should throw light on the utilisation of the GH¢10 billion Big Push infrastructure bond and job numbers from the 24-hour economy programme, delivery, not plans. “Savers financed this crisis. The review owes them a plan, not a footnote.”
There is a cost to this rotation that deserves attention: a saver who placed GH¢10,000 in a 91-day bill now earns about GH¢146 over three months, against roughly GH¢600 two years ago, a near-zero real return at 5.3% inflation. Longer-dated bonds, collective investment schemes and the Ghana Stock Exchange all offer a better path for that capital, and the Budget should point to it explicitly.
Prove the cocoa reset can pay farmers on time
For 32 years, an offshore syndicated loan financed each cocoa season, pledging 70–92% of the harvest to foreign lenders and costing over US$150 million in interest on the 2023/24 facility alone. Its 2024/25 replacement, upfront payment by global buyers, left farmers waiting when traders held back. From 2026/27, COCOBOD will instead fund the crop domestically in cedis through a roughly US$1 billion bond and commercial-paper programme, open to pension funds and non-resident investors. A companion Cocoa Board Bill will bar quasi-fiscal spending, guarantee farmers at least 70% of the gross export price, and mandate that half the crop be processed locally, changes that matter to roughly 800,000 farming households. The timing is unforgiving: the international cocoa price has more than halved, from about US$9,155 a tonne in June 2025 to US$4,272 in June 2026, with Ghana’s realised price down 52% year-to-date to US$3,748, squeezing revenue that must also service COCOBOD’s existing GH¢32 billion debt.
“I’m hopeful that there will be a clear confirmation of the issuance timetable and whether farmer arrears from the failed 2024/25 season are fully cleared. We also need to explain how the domestic market absorbs cocoa bonds alongside the GH¢20.2 billion sovereign programme and the GH¢10 billion Big Push bonds without pushing yields back up”, Julien added.
Level with us on gold and the cedi
The cedi’s recovery from about GH¢16 to the dollar in October 2024 to GH¢11.45 by May 2026 is real and visible in the price of appliances, medicine and cars. It is also being tested: the rate closed at GH¢11.55 on 17 July, a 9.5% year-to-date depreciation. Record gold prices did much of the work behind the recovery, but gold’s monthly average has fallen from above US$5,000 an ounce in February to about US$4,240 in June as markets price a possible Fed rate move in September. Gross reserves fell from US$14.2 billion in March to US$12.9 billion in June, a US$1.2 billion drawdown in a single quarter, taking import cover from 5.7 to 5.0 months. “A windfall saved is a buffer; a windfall spent is next year’s crisis. The questions are what gold and cocoa prices does the Budget now assume and how much of the reserve build is being treated as cyclical windfall rather than permanent income? What is the contingency if gold falls a further 15%?”, Julien asks.
Figure 2: Gross international reserves. The gold-built buffer gave back US$1.2 billion in Q2.
The bard for today’s review
Government has earned a measure of trust: inflation brought under control, the bond market reopened, the IMF programme completed, the currency stabilised. But the second half is harder, inflation is creeping back, the Gulf remains volatile, IMF oversight is winding down, and the 2027 debt wall is eighteen months away. On 23 July, Ghana does not need celebration. It needs hard numbers, an honest forecast, and delivery figures on the programmes that touch daily life. “This review is government’s chance to show its promised reset can hold without a safety net beneath it”, he concludes.
