Ghana was essentially declared bankrupt after mounting debts. Photo/africa.com
ACCRA – Ghana, a country in West Africa, has basically gone bankrupt. This country is ironic because in 2019 it was praised as a successful supporter of the International Monetary Fund (IMF), but now it is unable to bear the huge debt burden.
Quoting a report from the New York Times, Wednesday (27/9/2023), the Ghanaian government is facing bankruptcy due to difficulties paying billions of dollars in debt to international creditors.
The IMF provided a loan of USD 3 billion to stabilize Ghana’s economy amidst the financial crisis and rising debt.
Ghana’s ongoing debt crisis linked to Covid-19, geopolitical events, and rising food and fuel prices raise concerns about future financial stability.
Ghana’s government has filed for bankruptcy after failing to pay billions of dollars in debt to international creditors in December.
President Nana Akufo-Addo’s government said; “The government had no choice but to approve a $3 billion loan from the lender of last resort, the International Monetary Fund.”
The IMF loan, the government says, is to help explain Ghana’s financial crisis, in which government organizations owe billions to contractors and are in serious debt.
The New York Times report noted that the financial crisis had far-reaching impacts, with many contractors laying off workers, thereby exacerbating the country’s unemployment problem.
Emmanuel Cherry, chief executive of an association of Ghanaian construction companies, recently revealed that the government’s repayment to contractors amounted to 15 billion cedis, or about $1.3 billion, before interest accrued.