Opoku-Afari: IMF programmes unable to address political economy roots of debt accumulation

Opoku-Afari, a former First Deputy Governor of the Bank of Ghana, contends that International Monetary Fund-supported programmes have struggled to tackle the political-economy factors driving debt accumulation in Ghana over the past two decades. In his paper, "How not to Miss a Crisis: Lessons from Ghana," Opoku-Afari identifies several recurring gaps.

These include insufficient attention to electoral competition and patronage-related spending pressures, inadequate stress-testing of domestic debt's interaction with the banking system, incomplete coverage of the broader public-sector balance sheet, and an incomplete assessment of the sovereign-bank "doom loop." Opoku-Afari questions whether Ghana's treatment as a Lower Income Country-DSF case throughout this period, given its market access and debt structure, was appropriate.

He also highlights the IMF's limited ability to quantify rollover, liquidity, and currency-related risks, which may have underestimated the probability of rapid market closure—a risk that intensified as investor confidence waned, particularly following Moody's downgrade in February 2022. The former IMF Mission Chief notes three limitations in macroeconomic surveillance: overly optimistic debt sustainability analysis assumptions, insufficient consideration of domestic-debt dynamics and fiscal-financial feedback effects, and a focus on near-term consolidation rather than addressing structural drivers of recurrent debt accumulation.

Opoku-Afari concludes that Ghana's engagement with the IMF has often prioritized fiscal consolidation over comprehensive structural reforms.