The announcement that the Government of Ghana has requested a new 36-month Policy Coordination Instrument (PCI) from the International Monetary Fund (IMF), barely weeks after the conclusion of the $3 billion IMF Extended Credit Facility (ECF) programme, is a cause for serious national concern.

It is not progress. It is a continuation of a cycle of institutional dependency that has constrained Ghana's development choices for decades.

ISODEC calls on the Government, Parliament, civil society, and the Ghanaian public to question the fundamental assumption that underpins this decision: that Ghana cannot manage its own macroeconomic affairs without IMF oversight. We reject this assumption. It is not grounded in economic reality.

It is grounded in an outdated and ideologically loaded orthodox framework that has consistently served the interests of international creditors over the interests of Ghanaian citizens.

The PCI is structural adjustment by another name. It does not provide financing, but it does provide conditionality, and that is precisely the problem.

What the PCI Actually Means Let us be clear about what has happened. Ghana has exited the Extended Credit Facility, a formal borrowing arrangement, and entered the Policy Coordination Instrument, a non-financing arrangement. The government and some analysts present this as a positive transition. It is not.

The PCI imposes the same "upper credit tranche" conditionality as a regular IMF loan programme. Every six months, the IMF will assess Ghana's policies and issue a verdict, a verdict that determines whether Ghana can access international capital markets. In plain terms, Ghana is outsourcing its economic sovereignty to Washington, D.C., in exchange for a borrowing credential.

The stated goal, which is to "allow the government free space to borrow more internationally as domestic revenue shrinks" reveals the core problem.

The government's own fiscal strategy is premised on continued international borrowing as a substitute for domestic fiscal capacity. This is the debt treadmill. The IMF does not get Ghana off the treadmill. It manages the treadmill.

The Orthodox Framework is the Problem, not the Solution The mainstream economic framework that underpins IMF programmes such as ECF, PCI, or any other instrument, rests on a set of assumptions that heterodox economists have systematically challenged, and which Ghana's own experience has repeatedly demonstrated to be wrong.

The first assumption is that the government, like a household, must earn before it can spend. Under this view, when domestic revenue falls, spending must also fall, or the government must borrow internationally at the IMF's preferred terms, to fill the gap. This assumption drives austerity, such as cuts to public services, wage freezes, and subsidy removal. Ghanaians know this story well. They have lived it.

The second assumption is that fiscal deficits are inherently dangerous and must be managed primarily through expenditure cuts and revenue mobilisation that satisfies foreign creditors. This assumption ignores the fundamental question:

What is the deficit being used for? A deficit that builds schools, funds a Job Guarantee programme, or invests in renewable energy infrastructure is categorically different from a deficit that services external debt or subsidises import-dependent consumption.

These are not merely theoretical points. They have direct, practical consequences for Ghana's development course.

Heterodox economics does not argue for reckless spending. It argues for purposeful, functional spending evaluated by outcomes for Ghanaians, not by the approval ratings of the IMF.

What Heterodox Economics Tells us Modern Monetary Theory (MMT) and the tradition of Functional Finance offer a fundamentally different lens for understanding Ghana's fiscal situation.

The Modern Monetary Theory establishes that a government issuing its own sovereign currency, in Ghana's case, the Cedi, is not financially constrained in the same way a household or a firm is. The Government of Ghana cannot involuntarily run out of Cedis.

It creates Cedis when it spends and destroys Cedis when it taxes. The real constraints on government spending are inflation and real resource availability, not nominal funding gaps.

The IMF's framework conflates these two entirely different types of constraint. Functional Finance, the companion doctrine, argues that fiscal policy must be judged by its functional outcomes, not by adherence to random fiscal rules.

If unemployment is high, the government should spend more, regardless of the deficit position. If inflation is rising, the government should tighten, regardless of the revenue position. The criterion is economic performance, not accounting balance.

Applied to Ghana's current situation, these frameworks point to a different set of policy priorities. Rather than seeking IMF certification of creditworthiness, Ghana should be building domestic fiscal capacity through structural transformation policies such as expanding the tax base by formalising the economy; plugging the resource leakages through illicit financial flows; investing in productive sectors that reduce import dependency; and deploying targeted public employment programmes, a Job Guarantee as a permanent automatic stabiliser.

The IFF Dimension: Where the Money Actually Goes There is a profound irony in Ghana seeking IMF endorsement to borrow internationally while bleeding tens of billions of dollars through illicit financial flows (IFFs).

ISODEC, working with other Civil Society Organizations, United Nations Trade and Development, and the Ghana Statistical Service, has been at the forefront of Ghana's IFF measurement work.

Ghana's cumulative IFF losses for the period 2013 to 2023 are estimated at USD 32.6 billion, money that left Ghana's economy through trade misinvoicing, corporate tax abuse (Base Erosion and Profit Shifting), and the structural mechanisms of unequal exchange that drain value from commodity-dependent economies. To put this in perspective: this figure dwarfs the financing that any IMF programme would provide.

The IMF's structural conditions have historically constrained precisely the policies like progressive resource taxation, capital flow management, enhanced customs enforcement, and renegotiation of investment treaties that would reduce IFF leakages. There is a direct contradiction between what the IMF demands and what Ghana needs to do to retain the value generated by its own resources.

Before Ghana signs up to six-monthly IMF surveillance for the next three years, the government owes Ghanaians an honest accounting: how much of the revenue gap is attributable to IFF losses that could be recovered through domestic institutional strengthening?

The Sovereignty Question Ghana's Constitution vests fiscal authority in the Government of Ghana and the Parliament of Ghana.

There is no constitutional provision for the IMF to serve as a co-governor of Ghana's economic policy. Yet this is effectively what the PCI arrangement creates: a parallel review mechanism that, through its market signaling function, carries more practical authority than Parliamentary debate.

This is not simply a technical economic matter. It is a governance matter. It is a sovereignty matter. When Ghana's borrowing capacity and therefore its development financing depends on IMF approval every six months, the centre of gravity for economic decision-making shifts away from Accra and toward Washington. This is not an arrangement that any self-respecting developmental state should accept as normal.

African countries have historically been the most subjected to IMF conditionality, and the results speak for themselves. The continent with the greatest natural resource wealth remains the continent with the deepest financing gaps, the most limited fiscal space, and the most constrained development options.

The heterodox critique is not anti-growth or anti-market: it is a demand for a policy framework that actually works for African economies.

Ghana's fiscal problem is not that it lacks the permission to spend. It is that decades of orthodoxy have constrained its capacity to retain and deploy the value generated by its own people and resources.

What Ghana Should Do Instead ISODEC calls on the Government of Ghana to pursue a genuinely alternative fiscal strategy.

Specifically, we propose the following:

Strengthen domestic revenue mobilisation by intensifying efforts to combat illicit financial flows (IFFs). Ghana's inter-agency Technical Working Group on IFF measurement, the Ghana Statistical Service, and the National Development Planning Commission, supported by the UN Trade and Development, has developed world-class measurement capabilities. These must now be translated into enforcement actions such as real-time trade misinvoicing detection, Base Erosion and Profit Shifting audit capacity at the Ghana Revenue Authority, and renegotiation of extractive sector contracts.

Adopt a Functional Finance framework for the national budget. Government spending decisions should be evaluated against employment, productive capacity, and inflation outcomes, not against IMF-prescribed deficit targets. Parliament should mandate functional impact assessments for all major expenditure decisions.

Pilot a Job Guarantee programme. ISODEC has previously submitted to the Ministry of Finance a detailed framework for a national Job Guarantee programme estimated at GH¢2.72 billion for 500,000 participants. This programme would serve as a permanent automatic stabiliser, eliminating involuntary unemployment, maintaining aggregate demand during downturns, and providing a price anchor. It requires no IMF approval. It requires political will.

Engage African and multilateral alternatives. The African Continental Free Trade Area's Pan-African Payment and Settlement System (PAPSS), the African Export-Import Bank, the African Development Bank's domestic resource mobilisation windows, Sukuk bonds, and South-South development financing partnerships offer alternatives that do not require submitting to upper credit tranche conditionality. These options must be actively pursued.

Commission a parliamentary review of IMF conditionality outcomes in Ghana. Before entering any new arrangement, Parliament should conduct a rigorous, evidence-based review of the cumulative impact of IMF programmes on Ghana's fiscal autonomy, public service delivery, and structural transformation over the past years.

Conclusion Ghana is not a poor country. Ghana is a country whose wealth has been systematically extracted, misinvoiced, under-taxed, and undervalued for generations. The answer to this problem is not another round of IMF surveillance. The answer is a confident, evidence-based, heterodox fiscal framework that puts Ghanaian productive capacity, Ghanaian employment, and Ghanaian sovereignty at the centre of economic policy making.

ISODEC is committed to building the intellectual and institutional infrastructure for this alternative. We invite civil society organisations, economists, parliamentarians, trade unions, and citizens who share this commitment to join the conversation.

The IMF seal of approval is not Ghana's economic destiny. It is a choice. And it is a choice that Ghana can, and must, choose differently, for the kind of choice we make will make or unmake our economy.

Thank You!