Keep fuel subsidies temporary and well-targeted or risk fiscal damage - IMF warns Ghana
The International Monetary Fund (IMF) cautioned the government on July 27 in its Staff Report submitted to the Fund's Executive Board that recent fuel subsidy measures must remain temporary and carefully targeted to avoid undermining Ghana's fiscal gains. The IMF stressed that fuel subsidies should not become a permanent policy tool, stating, "the recent fuel subsidy measures must be temporary and well targeted." This warning came ahead of the approval of Ghana's Sixth Review under the Extended Credit Facility (ECF) programme.
The caution followed the government's announcement of a GH¢2 subsidy on every litre of diesel for the month of August, an intervention expected to cost the government about GH¢500 million if maintained throughout August, according to the Ministry of Energy. Energy and Green Transition Minister John Jinapor indicated the intervention is only for August 2026 and will be reviewed within that period. The IMF's concern is that prolonged subsidies could weaken government revenue, widen the fiscal deficit, and undermine the country's ongoing economic recovery programme.
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The International Monetary Fund (IMF) has issued a warning to the Ghanaian government regarding its recent fuel subsidy measures. This caution comes
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