* Ghanaian government faces bankruptcy as it struggles to pay billions in debt to international creditors.
* The IMF extended a $3 billion loan to stabilise Ghana’s economy amid the financial crisis and mounting debts.
* Ghana’s ongoing debt crisis linked to COVID-19, geopolitical events, and rising food and fuel prices raises concerns about future financial stability.
The Ghanaian government has filed for bankruptcy after failing to pay billions of dollars it owed to international creditors in December.
According to a report by The New York Times, President Nana Akufo-Addo’s administration “had no choice but to agree to a $3 billion loan from the lender of last resort, the International Monetary Fund,” which helped to explain Ghana’s financial crisis, in which government organisations owed billions to contractors and were in serious debt.
The media outlet noted that the financial crisis has had far-reaching effects, with many contractors laying off workers, exacerbating the country’s unemployment problem.
Emmanuel Cherry, the chief executive of an association of Ghanaian construction companies, recently disclosed that government back payments to contractors amounted to a staggering 15 billion cedis, or roughly $1.3 billion, before interest.
The reports also disclosed that the Ghanaian government owes independent power producers $1.58 billion and is in danger of experiencing widespread blackouts.
“The government is essentially bankrupt. It was the 17th time Ghana has been compelled to turn to the fund since it gained independence in 1957. This latest crisis was partly prompted by the havoc of the coronavirus pandemic, Russia’s invasion of Ukraine, and higher food and fuel prices,” the report read in parts.
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