Our other views on the PCI and IMF Statement

• Pivoting from aggressive consolidation to growth-friendly fiscal adjustment: In our Investor Note on the SLA in May 2026, we flagged a comment in the IMF statement which suggests that the Fund may accept a lower primary surplus in 2027, subject to certain safeguards. At the PCI approval, the IMF Board acknowledged that the recent improvements in Ghana’s debt trajectory have provided fiscal space that can be leveraged to support economic growth under the PCI. Consequently, the Fund has all but approved a reduction in the target primary surplus by 1.0% of GDP from the 1.5% rule in the new fiscal responsibility framework to 0.5% of GDP from 2027. This would require an amendment to the Public Financial Management (PFM) Act, which we expect to be tabled at the 2027 budget presentation to the Ghanaian Parliament in November 2026.

 

• Our estimate indicates that a reduction in the primary surplus to 0.5% of GDP will potentially release an extra spending of GHS 18.0bn, softening the fiscal squeeze and supporting the government’s priority spending to sustain the growth momentum. We foresee a rise in infrastructure spending, especially on roads, energy, health, and education projects under the authorities’ flagship “big push” and de-risking of investment to catalyse private capital into the 24-hour economy enclaves. While we believe that the extra spending reallocates fiscal space towards capital expenditure, we anticipate an increase in the domestic borrowing requirement compared to the 2025 – 2026 era of aggressive fiscal adjustment. Against the backdrop of upcoming DDEP maturities in 2027, we believe the domestic market will be well-funded to absorb the larger borrowing need with limited upward pressure on the domestic yield curve, subject to inflation dynamics.