26th September 2022 8:26:49 AM
2 mins readAn International Monetary Fund (IMF) staff team, led by Stéphane Roudet, Mission Chief for Ghana, will today, September 26, 2022, arrive in Accra to continue discussions with the government on policies and reforms that could be supported by the Fund.
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The team, per reports, will also have engagements with other stakeholders, including the Bank of Ghana, Parliament, business associations, and the Civil Society Group during the visit.
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Ghana turned to the IMF for assistance in July this year as its balance-of-payments deteriorated and hundreds took to the streets to protest against economic hardship.
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In the same month, an IMF staff team led by Carlo Sdralevich visited Accra to assess the current economic situation and discuss the broad lines of the government’s Enhanced Domestic Programme.
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Meetings were held with Vice President Dr Mahamudu Bawumia, Finance Minister Ofori-Atta, and the Governor of the Bank of Ghana, Dr. Ernest Addison, as well as Parliament’s Finance Committee, civil society organizations, and development partners, including UNICEF and the World Bank.
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At the end of its first assessment, the international body confirmed that Ghana’s economic challenges have been exacerbated by the deadly coronavirus disease (COVID-19) and the ongoing Russia-Ukraine war which began at the beginning of the year.
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“Ghana is facing a challenging economic and social situation amid an increasingly difficult global environment. The fiscal and debt situation has severely worsened following the Covid-19 pandemic. At the same time, investors’ concerns have triggered credit rating downgrades, capital outflows, loss of external market access, and rising domestic borrowing costs.
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In addition, the global economic shock caused by the war in Ukraine is hitting Ghana at a time when the country is still recovering from the Covid-19 pandemic shock and with limited room for maneuver. These adverse developments have contributed to slowing economic growth, accumulation of unpaid bills, a large exchange rate depreciation, and a surge in inflation”, the Fund said.
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Prior to the first team’s departure, the IMF staff assured that the Fund will continue to monitor the economic and social situation closely and engage the government.
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The eventual agreement between Ghana and the IMF will likely consist of $3 billion in financing over a three-year period, and contain elements of both Extended Credit Facility (ECF) and Extended Fund Facility (EFF) programmes.
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It is expected that the recent discussions between the Fund and the Ghana government will end on October 7, 2022.
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The Fund’s visit is coming at a time when Fitch, a rating agency, has downgraded Ghana’s credit to further junk status.
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Fitch downgraded Ghana’s Long-Term Local- and Foreign-Currency Issuer Default Ratings (IDRs) to ‘CC’, from ‘CCC’.
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The downgrade, it said, reflects the increased likelihood that Ghana will pursue a debt restructuring given mounting financing stress, with surging interest costs on domestic debt and a prolonged lack of access to Eurobond markets.
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Source: The Independent Ghana
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