IMF urges wealthy nations to support Ghana amid debt crisis
The International Monetary Fund (IMF) has called on wealthier nations to support countries like Ghana to overcome their debt crises. Speaking ahead of the IMF and World Bank Spring Meetings, Kristalina Georgieva, the IMF’s Managing Director, emphasized the need for wealthier countries to help vulnerable ones restructure their debts, in order to minimize the impact…
The International Monetary Fund (IMF) has called on wealthier nations to support countries like Ghana to overcome their debt crises. Speaking ahead of the IMF and World Bank Spring Meetings, Kristalina Georgieva, the IMF’s Managing Director, emphasized the need for wealthier countries to help vulnerable ones restructure their debts, in order to minimize the impact of the debt crises on the lives and livelihoods of their people.
Ghana, which has a debt stock of GH$575.7 billion, is one of more than 10 Low-Income Countries (LICs) in debt distress, and defaulted in servicing its debt last year. The country is now working with bilateral creditors to restructure their component, in order to earn a US$3 billion IMF assistance to help slow down inflation, prop up the currency, and return the economy to the path of growth. However, talks with China, which holds US$1.9 billion of Ghana’s debts, have dragged, fueling doubts over the country’s ability to secure a package before May.
The IMF MD warned that delays to debt restructuring requests were costly to the countries and the global economy, hence the need for additional support from wealthier countries for these “weakest members of our global family.” She also called for stronger support from wealthier nations “to bolster the IMF’s capacity to help our poorest member countries.”
In April 2020, the fund disbursed US$1 billion to Ghana under its Rapid Credit Facility (RCF) of the Poverty Reduction and Growth Trust (PRGT) to fight the COVID-19 pandemic and its effects. However, the PRGT now faces a funding shortfall of about US$1.6 billion due to increased demand by countries hit by the twin effects of the pandemic and the war in Ukraine. Ms. Georgieva emphasized the need for support from wealthier nations to ensure that the IMF can continue to provide vital support and help catalyze financing from others.
