The Ghanaian government declared bankruptcy in December after failing to pay billions of dollars in debt to foreign creditors.
According to the New York Times, President Nana Akufo-Addo’s government “had no choice but to agree to a $3 billion loan from the lender of last resort, the International Monetary Fund,” which helped to explain Ghana’s financial crisis, in which government organizations owed billions of dollars to contractors and were deeply in debt.
According to the media site, the financial crisis had a tremendous influence, resulting in countless contractors firing staff and increasing the country’s unemployment problem.
“Essentially, the government is bankrupt.” Ghana was forced to use the fund for the 17th time since gaining independence in 1957. The coronavirus outbreak, Russia’s invasion of Ukraine, and increasing food and gasoline prices all contributed to the present crisis, according to the research.
The chairman of a consortium of Ghanaian construction firms, Emmanuel Cherry, recently stated that the government owes contractors a whopping 15 billion cedis ($1.3 billion) in delayed back payments, before interest.
Ghana’s government, according to sources, owes independent power companies $1.58 billion and threatens extensive outages.
To address Ghana’s debt, the IMF proposed a comprehensive rescue plan that included cutting spending, increasing revenue, and protecting the most vulnerable citizens while negotiating with foreign creditors.
The issue will be a hot topic at the upcoming United Nations General Assembly. Another major concern is the developing world’s expanding debt burden, which is expected to exceed $200 billion.
According to the study, the latest IMF loan helped stabilize the economy by reducing currency swings and increasing trust. Inflation has fallen from a high of 54% in January to a current level of around 40%.
The IMF bailout of $3 billion (£2.4 billion) will not alleviate Ghana’s economic problems immediately, according to the country’s president in May.
