The Ghanaian government has reportedly changed its mind and will now seek a financial rescue package from the International Monetary Fund (IMF). The decision comes just a few days after residents took to the streets to protest the spiraling inflation and growing economic hardships.
After initially refusing to seek the International Monetary Fund (IMF)’s support, the Ghanaian government has said it will now hold formal talks with the financial institution, a report has said. According to the report, the government’s decision followed a conversation between President Nana Akufo-Addo and the IMF’s managing director, Kristalina Georgieva.
In addition to the spiraling inflation rate, Ghana has to contend with a negative balance of payments position which grew to $934.5 million in the first quarter of 2022. In the first quarter of 2021, the country’s balance of payments deficit was $429.9 million.
Meanwhile, the analyst quoted in the report praised Ghana’s decision, which they believe will help its economy. Commenting on the government’s decision to seek a bailout package 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 decision was almost inevitable, given the worsening economic situation and the threat of a balance of payments crisis due to the deteriorating external environment.
Ghana, which is West Africa’s second largest economy and one of the continent’s biggest producers of gold, has been reeling from the effects of the global pandemic and is reportedly close to a debt crisis.
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