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Ghana’s financial problems to persist despite $3 billion loan from IMF

According to Ghana's President Nana Akufo-Addo, the $3 billion (£2.4 billion) IMF bailout would not instantly solve the nation's economic problems.
President Akufo-Addo of Ghana/Image Source: Bloomberg
President Akufo-Addo of Ghana/Image Source: Bloomberg

According to Ghana's president, Nana Akufo-Addo, the $3 billion (£2.4 billion) IMF bailout would not instantly solve the nation's economic problems.

The Ghanaian president said that the IMF bailout will restore trust and put the nation's economy back on a solid foundation in a televised speech to the nation on Sunday.

"It should lead to the restoration of confidence and the reopening of avenues that have been closed to us this past year and a half. It should also lead to the resumption of many of the infrastructural projects that have stalled," President Akufo-Addo said.

In order to help the economy recover from the effects of the worldwide epidemic and Russia's invasion of Ukraine, he recognized that asking for assistance from the IMF was a difficult but essential decision. But others claim that egregious mismanagement is a contributing factor in the nation's economic woes.

Due to its enormous public debt and inflation, Ghana is currently experiencing one of its biggest crises in a generation. The government will be required to lower public spending and boost domestic revenue as part of the IMF bailout.

This will entail increasing taxes, cracking down on tax evaders, or reviewing current taxes higher.

The International Monetary Fund's executive board approved a $3 billion, three-year loan package for Ghana earlier this month on Wednesday 17th, allowing for an immediate payout of about $600 million and possibly offering a path out of the worst economic crisis the West African country has seen in a generation.

The IMF indicated in a statement that timely debt restructuring agreements with outside creditors would be crucial to the effective implementation of the Extended Credit Facility loan, intended to help Ghana solve immediate policy and financial difficulties.

Shortly after, Ghana relayed its plans to restructure its debt, seeking a $10.5 billion reduction in the amount of external debt service from 2023 to 2026. 

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