Ghana’s parliament has approved legislation tightening limits on how much the central bank can finance government spending, a move aimed at strengthening fiscal discipline and supporting macroeconomic stability, according to parliamentary proceedings reported by Reuters.
The new measures cap central bank financing of the budget at a lower threshold and reinforce restrictions on monetary support for government deficits, aligning policy more closely with commitments made under Ghana’s International Monetary Fund programme. The finance ministry has said the changes are intended to curb inflationary pressures and restore confidence in economic management after years of heavy reliance on central bank funding.
The Bank of Ghana has repeatedly warned that excessive monetary financing undermines price stability and weakens the currency, while the IMF has stressed that tighter controls are critical to sustaining Ghana’s economic recovery. Analysts say the reforms should help anchor inflation expectations and improve investor sentiment if consistently enforced, as highlighted by recent IMF programme reviews and statements from Ghanaian economic authorities.
