IMF blames Covid-19, Russia-Ukraine war for Ghana’s economic woes

According to information provided by the International Monetary Fund (IMF), the combined impact of the Russia-Ukraine war and the Covid-19 epidemic have made Ghana’s debt position worse.

The global lender claims that this has had an impact on the economy of the nation, causing significant inflation and a decline in the value of the Ghana cedi.

Following its trip to Ghana, the IMF said these things in a statement that was posted on its official website on Wednesday, July 13, 2022.

“Ghana is dealing with a severe economic and social condition in a demanding international climate. The COVID-19 epidemic has resulted in a dramatic worsening of the financial and debt crisis.

Investors’ worries have also led to credit rating downgrades, capital outflows, a loss of access to external markets, and an increase in domestic borrowing prices.

Additionally, Ghana is still recuperating from the Covid-19 pandemic shock and has little room for maneuver, according to the IMF, when the nation is being rocked by the global economic shock brought on by the conflict in Ukraine.

The Fund added, “These unfavorable trends have led to sluggish economic growth, accumulation of unpaid debts, a significant loss in the value of the dollar, and an increase in inflation.”

Between July 6 until July 13, 2022, a team from the IMF lead by Carlo Sdralevich visited Accra to have a firsthand understanding of the situation there and to talk about how it could support the government’s Enhanced Domestic Program.

In this respect, the team spoke with Dr. Mahamudu Bawumia, Vice President; Ken Ofori-Atta, Finance Minister; and Dr. Ernest Addison, Governor of the Bank of Ghana.

Additionally, the Fund involved civil society groups, the World Bank, UNICEF, and the Parliamentary Finance Committee.

The team thanked all pertinent parties for their cooperation at the conclusion of their one-week meetings.

The IMF has stated its intention to assist Ghana in overcoming its present economic difficulties.

The IMF stated that it would “continue to closely monitor the economic and social situation” and that its staff would “engage in the coming weeks with the authorities on the formulation of their Enhanced Domestic Program that could be supported by an IMF arrangement and with broad stakeholders’ consultation.”

“We reiterate our commitment to assist Ghana during this trying moment in accordance with the IMF’s objectives.

The IMF was contacted by Ghana on July 1, 2022. Following the nation’s economic problems, the President had instructed the Finance Minister to contact the Fund.

Citizens have differing opinions about Ghana’s re-entry into the IMF as a result of this event. While some people have applauded the decision, some people have continued to criticize the administration.

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