Ghana is seeking support from the International Monetary Fund (IMF) at a time when the country is going through an economic crisis aggravated by the Russian invasion of Ukraine, which has caused prices to explode, especially at the pump, the government said on Friday.
As a result of the Covid-19 pandemic and now the war in Ukraine, the West African country recorded inflation of 27% in May, its highest level in two decades.
President Nana Akufo-Addo had previously rejected calls for financial assistance from the IMF. But on Friday he “authorized Finance Minister Ken Ofori-Atta to enter into formal engagements” with the IMF, Information Minister Kojo Oppong Nkrumah said in a statement.
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“At a meeting on June 30th, 2022, the cabinet indicated its support for the decision,” the statement said on Friday, July 1.
“The engagement with the IMF will seek to provide a balance of payment support as part of a broader effort to quicken Ghana’s build back in the face of challenges induced by the Covid-19 pandemic and, recently, the Russia-Ukraine crises”. the statement added.
For several months, many Ghanaians have been demonstrating against the high cost of living amid rising food and fuel prices, putting pressure on President Akufo-Addo.
Several fights have also broken out in the hung parliament as the government tries to push through reforms it says could save the economy.
President Akufo-Addo is urgently seeking to find new sources of revenue to offset the weight of his country’s debt , which represents nearly 80% of GDP.
In 2015, Ghana had already requested assistance from the IMF and obtained a loan of approximately one billion dollars in return for a budgetary austerity plan, which provided for a reduction in public expenditure .