THE Ghana government says it will begin talks with the International Monetary Fund to support its economic programme – a massive u-turn on its policy not to seek assistance from the multilateral lender.
An official statement released on Friday said President Nana Akufo-Addo has authorised Finance Minister Ken Ofori-Atta to start ‘formal engagements’ after a phone conversation with IMF Managing Director Kristalina Georgieva.
According to Bloomberg, the country’s eurobonds surged after the announcement, with the benchmark 2027 securities climbing 7.5 percent to 61.5 cents in the dollar by 1:24 p.m. in London.
Ghana, Africa’s second-biggest cocoa and gold producer, increased its key interest rate 450 basis points this year – the second-largest margin on the continent – to stem a sell-off of government bonds and contain price pressures. Inflation accelerated to a more than 18-year high of 27.6 percent in May and Ghana’s cedi is the worst-performing African currency, weakening 22.6 percent since the beginning of the year.
The country’s dollar reserves dropped to $8.3bn at the end of April from $9.7bn at the end of last year, according to the central bank, while the public debt increased to 78 percent of gross domestic product at the end of March, compared with 76.6 percent at the end of December 2021.
While in opposition, officials of the current government denigrated the then Mahama administration for going to the IMF as a result of their poor economic governance. It has repeatedly said it would not seek a monetary programme from the IMF, plans to borrow $1 billion from commercial and multilateral lenders by mid-July, Finance Minister Ken Ofori-Atta told Bloomberg in May.