Ghana will begin talks with the International Monetary Fund to support the government’s economic program, reversing a policy decision not to seek assistance from the multilateral lender.
President Nana Akufo-Addo authorized Finance Minister Ken Ofori-Atta to start “formal engagements” after a phone conversation with IMF Managing Director Kristalina Georgieva, the Information Ministry said in a statement on Friday.
The West African nation’s eurobonds surged after the announcement, with the benchmark 2027 securities climbing 7.5% to 61.5 cents in the dollar by 1:24 p.m. in London.
Africa’s second-biggest cocoa and gold producer has 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% in May and Ghana’s cedi is the worst-performing African currency, weakening 22.6% since the beginning of the year.
Ghana’s dollar reserves dropped to $8.3 billion at the end of April from $9.7 billion at the end of last year, according to the central bank. The country’s public debt increased to 78% of gross domestic product at the end of March, compared with 76.6% at the end of December 2021.
The government, which has repeatedly said it would not seek a monetary program 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.
(Bloomberg)
