IMF says it will work with Ghanaian government on program | Investment News

By Rachel Savage and Cooper Inveen

ACCRA/LONDON (Reuters) – The International Monetary Fund (IMF) will work with the Ghanaian government to develop a potential support package, it said on Wednesday, citing a “difficult economic and social situation” after a visit by a week in West Africa. nation.

Hundreds of people took to the streets of Accra, Ghana’s capital, last month to protest against high inflation, weak growth and the deterioration of the local currency.

A few days later, the government asked for help from the IMF, despite months of repeated promises not to do so.

“The IMF team held initial discussions on a comprehensive reform package to restore macroeconomic stability and anchor debt sustainability,” said Carlo Sdralevich, head of the IMF team that visited Ghana. July 6-13, in a statement.

The week’s discussions focused on improving the country’s fiscal balances, strengthening monetary policy and stabilizing the financial sector through a set of national reforms that could be supported by the fund, he said in the press release.

Authorities hope a package of measures will help Ghana overcome its nearly $1 billion balance of payments deficit and bring down runaway inflation which hit 29.8 percent on Wednesday, its highest level since December 2003.

Ghana’s debt has steadily increased from 54.2% of GDP in 2015 to 76.6% at the end of 2021, according to government data. Debt servicing cost just under 48% of government revenue in 2021 and Eurobond yields have been too high this year to issue new ones.

The Ministry of Finance has blamed Ghana’s problems on recent external factors, including the COVID-19 pandemic and the war in Ukraine.

The IMF said in its statement on Wednesday that these forces had left Ghana with “limited room for manoeuvre”.

(Reporting by Rachel Savage and Cooper Inveen; Editing by Kirsten Donovan)

Copyright 2022 Thomson Reuters.

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