2 years ago
The Ghanaian authorities has reportedly changed its caput and volition present question a fiscal rescue bundle from the International Monetary Fund (IMF). The determination comes conscionable a fewer days aft residents took to the streets to protestation the spiraling ostentation and increasing economical hardships.
Ghana’s Growing Balance of Payments Deficit
After initially refusing to question the International Monetary Fund (IMF)’s support, the Ghanaian authorities has said it volition present clasp ceremonial talks with the fiscal institution, a study has said. According to the report, the government’s determination followed a speech betwixt President Nana Akufo-Addo and the IMF’s managing director, Kristalina Georgieva.
As per the report, the government’s about-face comes aft Ghana’s ostentation rate, which topped 27.6% successful May, arsenic good arsenic the deteriorating economical situation, helped spark thoroughfare protests crossed the state successful precocious June. Ghana’s evident volte-face besides came little than 2 months aft the cardinal slope hiked main involvement rates by 200 ground points to 19%.
In summation to the spiraling ostentation rate, Ghana has to contend with a antagonistic equilibrium of payments presumption which grew to $934.5 cardinal successful the archetypal 4th of 2022. In the archetypal 4th of 2021, the country’s equilibrium of payments shortage was $429.9 million.
Decision Almost Inevitable
Meanwhile, the expert quoted successful the study praised Ghana’s decision, which they judge volition assistance its economy. Commenting connected the government’s determination to question a bailout bundle from the IMF, Razia Khan of Standard Chartered said this was “positive news.” Another analyst, Leslie Dwight Mensah from the Accra-based Institute for Fiscal Studies, said:
This determination was astir inevitable, fixed the worsening economical concern and the menace of a equilibrium of payments situation owed to the deteriorating outer environment.
Mensah besides hinted that talks with the IMF could perchance boost investors’ assurance successful the country’s quality to conscionable its obligations. In the meantime, different report quotes an IMF spokesperson who pledges the institution’s readiness to assistance “Ghana to reconstruct macroeconomics stability; safeguard indebtedness sustainability, beforehand inclusive and sustainable maturation and code the interaction of the warfare successful Ukraine and the lingering pandemic.”
Ghana, which is West Africa’s 2nd largest system and 1 of the continent’s biggest producers of gold, has been reeling from the effects of the planetary pandemic and is reportedly adjacent to a indebtedness crisis.
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