IMF warns high costs are slowing Africa’s economic recovery -

The International Monetary Fund(IMF) has urged countries in Sub-Saharan Africa, including Ghana, to urgently remove barriers stifling private sector expansion, warning that weak public spending and delayed reforms could undermine the region’s fragile economic recovery.

In its April Regional Economic Outlook for Sub-Saharan Africa, the IMF identified the high cost of doing business, poor performance of state-owned enterprises, and weak regional trade links as major obstacles slowing productivity, discouraging investment, and limiting long-term growth across the region.

The Fund said governments must implement targeted reforms in critical sectors such as energy, transport and telecommunications, while improving governance, transparency and cost recovery in state-owned enterprises without worsening hardship for vulnerable citizens.

It also stressed that accelerating the implementation of the African Continental Free Trade Area through the removal of non-tariff barriers and the modernisation of customs systems would help reduce trade costs, strengthen supply chains and create wider markets for local businesses.

The IMF further raised concerns over persistent inefficiencies in public spending on health, education and infrastructure, noting that limited value for money continues to weaken the development impact of government expenditure in many African economies.

Beyond fiscal reforms, the Fund called for faster digital transformation, encouraging governments to adopt affordable artificial intelligence tools in revenue mobilisation and public service delivery, while investing in reliable energy, digital skills, cybersecurity and stronger data systems.

It also urged African economies to deepen domestic financial markets to expand local currency financing, reduce exposure to external borrowing shocks and provide stronger support for private sector growth.