"Ghana set to seek as much as $1.5 billion from the IMF"

" \n Ghana set to seek as much as $1.5 billion from the IMF \n \n\n \n Ghana may seek as much as $1.5 billion from the International Monetary Fund to shore up its finances and win back access to the global capital markets. \n \n\n \n The continent\u2019s second-biggest cocoa and gold producer reversed a policy decision not to seek assistance from the multilateral lender as the outlook for world economy worsened. The final loan amount will be decided after initial assessments, Finance Minister Ken Ofori-Atta said in a phone interview, hours before talks began with the IMF in the nation\u2019s capital, Accra. \n \n\n \n It was a difficult decision but the right one \u201cbecause the global outlook was really grim and its negative effects on the Ghanaian economy were glaring,\u201d Ofori-Atta said. \n \n\n \n After Moody\u2019s Investors Service cut Ghana\u2019s rating the nation lost access to overseas capital markets and \u201chence our inability to get the needed dollars, which created balance of payment problems and a possible rundown of our reserves.\u201d \n \n\n \n \n \n\n \n The nation\u2019s 17th move to tap the IMF may help President Nana Akufo-Addo\u2019s administration avoid the fate of struggling Sri Lanka, which sought a bailout from the lender earlier this year after shunning support for months because of the austerity measures involved. Ghana has been battling to stabilize debt that has grown to 78% of gross domestic product at the end of March, from 62.5% five years ago. \n \n\n \n \u201cAn IMF program will give the government\u2019s reforms the credibility it was lacking, which opens up access to additional financing,\u201d Yvonne Mhango, Renaissance Capital\u2019s head of research for sub-Saharan Africa, said in an emailed response to questions. That access will depend on \u201cthe outcome of the IMF\u2019s assessment, in particular the sustainability of Ghana\u2019s debt,\u201d she said. \n \n\n \n The nation\u2019s dollar bonds, which have been trading at distressed levels, jumped after the government announced its plan to seek support Friday. Investors were concerned Ghana won\u2019t be able to refinance foreign debt after the pandemic and the war in Ukraine sent borrowing costs soaring. \n \n\n \n Ghana\u2019s 2026 eurobonds extended gains on Wednesday, rising 1.9% to 81 cents in the dollar, the highest since April. The yield fell 44 basis points to 15.89% by 3:21 p.m. in London. \n \n\n \n \u201cThe IMF stepping in gives credibility for the short term and therefore we need to put in long-term measures that will help build a resilient economy to prevent loss of confidence,\u201d Agyapomaa Gyeke-Dako, a senior lecturer in economics at the University of Ghana Business School, said by phone from Accra. \n \n\n \n Ghana will propose its own program to the lender. The government\u2019s plan -- for a minimum three years -- will aim to restore debt sustainability and macroeconomic stability, strengthen the central bank\u2019s monetary policy and build buffers against economic shocks, the nation\u2019s finance ministry said on Tuesday in an emailed statement. \n \n\n \n \u201cThis program allows for a catalytic engagement including regaining access to the capital market,\u201d Ofori-Atta said in the interview, adding that Egypt\u2019s talks with IMF earlier this year encouraged the North African nation to sell Samurai bonds . \n \n\n \n Ghana\u2019s foreign-exchange reserves have dropped to $8.3 billion at the end of April, from $9.7 billion at the end of last year. \n \n\n \n The nation\u2019s central bank in May lifted its benchmark interest rate by 200 basis points to 19% in a bid to slow inflation, which accelerated at 27.6% in May. \n "

"Ghana set to seek as much as $1.5 billion from the IMF"

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