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Ghana swallows humble pie, begins talks with IMF over dwindling economy

Published

2 years ago

July 1, 2022

West African country, Ghana, has swallowed its pride as it made bold steps to commence formal engagements with the International Monetary Fund (IMF), to support the its economy.

Ghana’s president, Nana Addo Dankwa Akufo-Addo, in a statement issued by the country’s information ministry has authorized Finance Minister, Ken Ofori-Atta to begin discussion with the monetary body following a telephone conversation between the President and the IMF Managing Director, Miss Kristalina Georgieva.

According to the statement released on Friday, the cabinet indicated its support for the decision at a meeting on Thursday.

“The engagement with the IMF will seek to provide a balance of payment support as part of a broader effort to quicken Ghana’s build back in the face of challenges induced by the Covid-19 pandemic and, recently, the Russia-Ukraine crisis”. The statement reads.

Recall that in May, Ghana’s Finance Minister, Ken Ofori-Atta recently announced that the West African country is committed to managing its debt without assistance from the International Monetary Fund (IMF).

The country in April 2015 had turned to the IMF for a $918-million loan to support its ailing currency and help stabilize the economy.

It exited the IMF programme in December 2018, and during the 2019 budget presentation to Parliament, the Minister of Finance, Ken Ofori-Atta, assured the country that the government would back the IMF reforms with legal and institutional measures to ensure the irreversibility of the gains made so far.

Other African countries like Zambia, Somalia, and the Benin Republic alre also struggling with their monetary and capital positions and hanging on to international organizations like the International Monetary Fund to get out of the mess.

According to the World Bank, Ghana’s rapid growth was halted by the COVID-19 pandemic, the March 2020 lockdown, and a sharp decline in commodity exports.

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Nigeria wants $2.25 billion World Bank loan

Published

18 hours ago

April 23, 2024

Ifeoluwa Dada

Nigeria’s Finance Minister, Wale Edun, has revealed that the country is seeking up to $2.25 billion in World Bank loans and expects the bank’s board to approve the request in June.

The move was announced in a statement following the International Monetary Fund/World Bank spring meetings in Washington, D.C as the country also aims to issue diaspora bonds later this year to attract much-need foreign exchange into the country.

The World Bank loans would include $1.5 billion for development policy and $750 million for program-for-results, the statement said. It also said that the bank would meet in June to decide whether to approve the plan in its entirety.

The multilateral body is yet to comment on the revelation at press time.

Nigeria one of Africa’s biggest oil producers has struggled lately mainly over industrial-scale crude oil theft, and troubles getting foreign currency, which caused its naira currency to drop to all-time lows against the U.S. dollar. It has since recovered, though.

Already, the country is on record levels of debt, high unemployment, and large amounts of money from the central bank. However, Edun has insisted that the government had cut the money it borrowed from the central bank in half.

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Ghana’s finance minister anticipates debt restructuring MoU with lenders

Published

1 day ago

April 22, 2024

Ifeoluwa Dada

Ghana’s Finance Minister has announced that the country’s two main creditors will send him a draft Memorandum of Understanding (MoU) on a restructuring deal in May, signifying a major progress in the country’s debt reform.

Once the MoU is signed, it will make public the deal that was made in January to restructure $5.4 billion in loans with its official creditors, such as China and France.

The restructuring is a big step toward Ghana getting rid of its debt as it works to get out of the worst economic crisis in a generation. It should also allow the country to get more money from its $3 billion IMF program.

Mohammed Amin Adam said he was sure the International Monetary Fund (IMF) and the World Bank would work together at the Spring Meetings in Washington, D.C. In June, the Monetary Fund’s executive board will agree to review its staff-level deal.

From 2023 to 2028, Ghana’s national debt to gross domestic product level was supposed to go down by 15%. This guess says that the number will have gone down every year for six years, ending at 69.96% in 2028.

Ghana didn’t pay back most of its foreign loans in December 2022 because it became too expensive to do so. But now it needs to work out a deal with private holders of about $13 billion in foreign bonds. It has also changed most of its domestic debt.