Hard choices to be made on Ghana, IMF deal

International Monetary Fund (IMF) finally approved a US$3 billion 36-month arrangement with Ghana. It immediately disbursed the first tranche of US$600 million.

This is the second time in the past eight years that the country has approached the IMF. And it’s the 17th time since independence in 1957 – that’s roughly once every four years on average.

The first tranche of the latest loan is expected to be used to bolster Ghana’s foreign currency reserves and help stabilise the cedi as well as for budget support, according to the finance ministry.

Ghana has been facing severe economic and financial challenges since early 2022. This has included defaulting on some of its domestic and international debt. In December 2022, Ghana declared a moratorium on its international debt and further technically defaulted in February 2023 after failing to pay a coupon – the interest rate paid on a bond – on one of its debts following the expiration of a grace period.

The country’s unsustainable debt levels forced the government to go back to the IMF for another bailout in July 2022.

By The Conversation

https://theconversation.com/ghana-and-the-imf-have-struck-a-deal-but-hard-choices-lie-ahead-206240