Ghana’s economy has been hit hard by the COVID-19 pandemic, resulting in a drastic reduction of private sector funding. Consequently, the country has reached out to the World Bank and the International Monetary Fund (IMF) for concessionary loans to revive the economy. A concessionary loan is a loan made on more favourable terms than the borrower could obtain in the marketplace. These terms may include a lower interest rate or deferred repayments.
President Nana Addo Dankwa Akufo-Addo had a meeting with the visiting Director General of the World Trade Organization, Dr Ngozi Okonjo-Iweala, where he discussed the economic challenges facing Ghana. The President emphasized that the state of Ghana’s economy makes it difficult to go to the capital market to borrow. He, therefore, pleaded with the World Bank and IMF to act in the interest of struggling economies like Ghana.
Dr Ngozi Okonjo-Iweala suggested that Ghana should consider re-adjusting how it has been conducting its affairs to boost its ability to attract investment. She further urged the country to look at other developing countries as possible places where manufacturing can also take place. “I think these are some of the things that Ghana should consider. Ghana is a much-loved country, and I think that your ability to attract investment should be something very important for you to talk to several of these global supply chains to see if they can also consider Ghana as a possible destination,” she advised.
However, Ghana’s move to restructure its local currency and overseas debt has resulted in the first loss on record for two of the nation’s top banks. Ghana Commercial Bank PLC and Standard Chartered Bank Ghana Ltd, reported a loss of 593.4 million cedis and 297.8 million cedis, respectively, for the year ending December 2021. Banks operating in Ghana have taken a hit of about $1.4 billion as the country restructures most of its public debt, estimated at 576 billion cedis.
In a nutshell, Ghana is grappling with economic challenges due to the COVID-19 pandemic, making it difficult to borrow from the capital market. The country has reached out to the World Bank and IMF for concessionary loans. The Director-General of the World Trade Organization urged Ghana to re-adjust how it has been conducting its affairs to boost its ability to attract investment. However, the country’s move to restructure its local currency and overseas debt has resulted in the first loss on record for two of the nation’s top banks.