IMF agrees to give Ghana $3 billion debt bailout

Dec 13, 2022, 6:00 AM | Updated: 6:04 am

ACCRA, Ghana (AP) — The International Monetary Fund has agreed to give Ghana $3 billion to try to get the West African nation’s debt under control, restore financial stability and help people most at risk from rising prices and other economic problems.

The announcement this week say follows IMF officials’ two-week visit this month to Ghana’s capital Accra, where they discussed support for the country’s policy and reform plans with authorities. Ghana has been struggling with high public debt, rising inflation and a weakening currency.

At a press conference Tuesday, Finance Minister Ken Ofori-Atta said Ghana was “committed to the program and will work towards meeting the demands.” He said the agreement will help restore economic stability, tackle price spikes and strengthen the currency.

“The Ghanaian authorities have committed to a wide-ranging economic reform program, which builds on the government’s Post-COVID-19 Program for Economic Growth (PC-PEG) and tackles the deep challenges facing the country,” Stephane Roudet, IMF’s mission chief to Ghana, said in a statement Monday.

Ghana’s reforms are focused on shoring up public finances while protecting the vulnerable, he said. The changes include creating a medium-term plan to bring in revenue, increasing tax compliance, making the country’s finances more transparent and improving how public industries are handled.

Ghana also announced it will restructure its debt and “committed to strengthening social safety nets, including reinforcing the existing targeted cash-transfer program for vulnerable households and improving the coverage and efficiency of social spending,” Roudet said.

The goal is to restore economic stability and debt sustainability while laying the foundation for stronger growth, the IMF said.

IMF managers and board members still must approve the three-year agreement, which comes under a program providing financial assistance to countries with balance-of-payments problems. Ghana’s partners and creditors also must acknowledge receiving financing assurances, the IMF statement said.

The deal is a “crucial lifeline” and positive step, said Rukmini Sanyal, a Ghana analyst for the Economist Intelligence Unit, a research and analysis division of the Economist Group.

Inflation reached more than 40% in October, the highest it’s been since July 2001 and well above the central bank’s target of 6% to 10%, according to Trading Economics, which provides global economic statistics. Prices accelerated by some 5% for food and more than 10% for non-food items, the company said.

Public debt has jumped from more than 63% of economic output in 2019 to an estimated more than 100% this year, Sanyal said. The exchange rate also is under pressure and Ghana has lost access to international capital markets, provoking a drawdown in foreign exchange reserves, she said.

The IMF says reducing inflation, boosting market confidence and making it easier for Ghana to withstand external shocks were priorities, with work from the Bank of Ghana on monetary policy and exchange rate flexibility and the government launching a domestic debt exchange.

___

Mednick reported from Dakar, Senegal.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

A migrant from Michoacan, Mexico, uses the CBPOne app Tuesday, Jan. 24, 2023, in Tijuana, Mexico. A...
Associated Press

Online system to seek asylum in US is quickly overwhelmed

TIJUANA, Mexico (AP) — Hours before sunrise, migrants at one of Mexico’s largest shelters wake up and go online, hoping to secure an appointment to try to seek asylum in the U.S. The daily ritual resembles a race for concert tickets when online sales begin for a major act, as about 100 people glide their […]
6 hours ago
Associated Press

Challenge for Tunisian democracy: Getting voters to show up

TUNIS, Tunisia (AP) — Tunisia was once the Arab world’s hope for a new era of democracy. Now it’s in the midst of an election that’s more of an embarrassment than a model. Barely 11% of voters turned out in the first round of parliamentary elections last month, boycotted by opposition Islamists and ignored by […]
6 hours ago
Associated Press

Philippines probes labor abuses in Kuwait after new killing

MANILA, Philippines (AP) — The Philippine government said Saturday it will take steps to assess and prevent abuses including rape and maltreatment of Filipino workers in Kuwait, after a housemaid was killed and dumped in a desert in the oil-rich emirate. The remains of Jullebee Ranara were flown home Friday night from Kuwait, where the […]
6 hours ago
Italian Prime Minister Giorgia Meloni departs Algiers after a two day official visit in Algeria, Mo...
Associated Press

Italy’s premier visits Libya for talks on energy, migration

CAIRO (AP) — Italy’s prime minister visited Libya for talks Saturday with officials from the country’s west-based government focusing on energy and migration, top issues for Italy and the European Union. Libya is the third North African country Prime Minister Giorgia Meloni visited over the last two weeks as she seeks to secure new supplies […]
6 hours ago
FILE  - A view of a Flybe flight departing from Manchester Airport, Manchester, England, Jan. 13, 2...
Associated Press

Flights canceled as UK airline Flybe sinks into bankruptcy

LONDON (AP) — Struggling U.K. regional airline Flybe collapsed for the second time in three years Saturday, putting jobs on the line and leaving passengers stranded. The airline initially slumped into bankruptcy in March 2020, shedding 2,400 jobs, as coronavirus restrictions decimated the travel industry. It relaunched in April last year, flying many of the […]
6 hours ago
CORRECTS THE PHOTOGRAPHER'S NAME TO KWIYEON HA - Staff of Kyodo Senpaku Co. holds canned whale meat...
Associated Press

Japan firm opens whale meat vending machines to push sales

YOKOHAMA, Japan (AP) — A Japanese whaling operator, after struggling for years to promote its products amid protests from conservationists, has found a new way to cultivate clientele and bolster sales: whale meat vending machines. The Kujira (Whale) Store, an unmanned outlet that recently opened in the port town of Yokohama near Tokyo, houses three […]
1 day ago

Sponsored Articles

(Pexels Photo)...

Sports gambling can be fun for adults, but it’s a dangerous game for children

While adults may find that sports gambling is a way to enhance the experience with more than just fandom on the line, it can be a dangerous proposition if children get involved in the activity.
(Photo via MLB's Arizona Fall League / Twitter)...
Arizona Fall League

Top prospects to watch at this year’s Arizona Fall League

One of the most exciting elements of the MLB offseason is the Arizona Fall League, which began its 30th season Monday.
...
Children’s Cancer Network

Children’s Cancer Network celebrates cancer-fighting superheroes, raises funds during September’s Childhood Cancer Awareness Month

Jace Hyduchak was like most other kids in his kindergarten class: He loved to play basketball, dress up like his favorite superheroes and jump as high as his pint-sized body would take him on his backyard trampoline.
IMF agrees to give Ghana $3 billion debt bailout