Ghana: New Fiscal Council

What happened: President John Mahama nominated five individuals to serve on a newly constituted Fiscal Council, an independent statutory body charged with strengthening financial oversight and decision-making after the country exits the IMF program in May.

Why it matters: The collective experience and reputation of the council nominees signal Ghana’s commitment to transparency and sustainable debt management, fostering greater trust among international investors in the nation's public finances.

What happens next: We anticipate the council will manage short-term fiscal oversight with relative ease; however, maintaining this discipline over the medium-to-long term will be tougher as political pressures and external economic shocks come into play, serving as a true test of the group’s effectiveness.

President Mahama inaugurated a five-member Fiscal Council, an independent body designed to enhance transparency and improve decision-making following the country's debt crisis. The team is tasked with monitoring compliance with fiscal rules and goals — specifically a 45% debt-to-GDP ratio by 2034 and an annual primary surplus of 1.5% of GDP — while providing independent assessments and advice to improve budget credibility. All five nominees are subject to parliamentary approval before the council becomes operational.

The Fiscal Council

Implementing the Fiscal Council demonstrates the Mahama administration's commitment to enduring fiscal discipline and domestic control as Ghana exits its IMF program, geared toward strengthening long-term debt sustainability and bolstering investor sentiment following the 2022 debt crisis. Moreover, fiscal councils are widely recognized for reducing sovereign risk, strengthening policy predictability and monitoring and tracking compliance – all of which signal continuity over short-term political decision-making.

However, our contacts remain skeptical about the council’s effectiveness, noting that Mahama has a habit of setting up councils and committees to tackle specific matters that fail to bear much fruit. As such, we expect Finance Minister Ato Forson to continue to be hands-on with economic matters, with the council largely focused on tracking the government’s performance.

Council Nominations

The group brings a diverse blend of policy, finance, and academic expertise, anchored by the nomination of Dr. Emmanuel Oteng Kumah, a former IMF technocrat and banking veteran, as chairperson. We expect his background in both institutional and private-sector banking to strengthen independent analysis of government fiscal policy, transparency and debt sustainability, providing credible, non-partisan leadership to the council.

Kumah and fellow banking heavyweights Dr. Henry Akpenamawu Kofi Wampah (former governor of the Bank of Ghana) and Kweku Bedu-Addo (former CEO of Standard Bank for Ghana and Southern Africa), served at the very top of their respective institutions and will ensure private-sector perspectives are well represented.

These three men will hold primary sway in the council and provide objective and unbiased stewardship. Wampah has reportedly kept a low profile since his governorship at the Bank of Ghana (BoG) — we hear he was well taken care of under the former Mahama administration and is therefore not driven by financial gain — while Addo has steered clear of politics. Both will likely view their nominations as an act of national service.

Patrick O. Asuming, associate professor of development economics at the University of Ghana and a fellow at Columbia University's SIPA, and Leslie Dwight Mensah, a research fellow at the Institute for Fiscal Studies (IFS) think tank, are known for their public contributions to economic discussions. However, they will likely defer to the senior members of the council due to their deeper experience and as a sign of respect.

Such a prestigious appointment validates Asuming’s academic quality, while Mensah will likely gain the most from the nomination due to his close government ties. Notably, his employer, the IFS, is owned by Dr. Kwabena Duffour, whose background includes roles such as BoG governor, finance minister and NDC presidential candidacy aspirant. According to our contacts, if anyone could gain a future government posting from their appointment, it would be Mensah.

However, critics have questioned the council’s ability to remain free from political interference, given the country’s reputation for weak expenditure controls and recurrent fiscal slippages, with some even suggesting the IMF program should be extended. In our view, these appointments — bar Mensah — are Mahama’s attempt to project non-partisan, inclusive leadership, which also serves the dual purpose of allaying criticism from an active civil society.

Moreover, for Mahama, these fiscal reforms are a calculated move aimed at safeguarding his legacy and strengthening the party's electoral position for 2028. Having observed the reputational damage his predecessor's economic record caused, he is not taking any chances with his own presidency.

Economic Implications

We expect the government will adhere to the fiscal rules in the short term as it continues to heavily curtail spending; any breach requires that Forson submit corrective plans to the cabinet within four months, with remedial measures implemented in the subsequent annual budget.

However, medium- to longer-term compliance could prove more challenging given Ghana’s reputation for fiscal slippages — particularly during electoral cycles, when public spending often exceeds revenue growth, leading to debt accumulation. The country’s exposure to commodity price shocks and its indirect exposure to the war in Iran could also raise government financing costs, especially if petroleum and transportation prices rise significantly for a prolonged period.

Overall, early indicators suggest a strong commitment to fiscal rules and budgetary responsibility, but the proof of the council’s effectiveness will be in the country’s economic recovery and resilience, especially as it navigates geopolitical volatility and upcoming political cycles.