IMF board approves $3 billion bailout for Ghana amid economic crisis

IMF‘s executive board has approved a $3 billion bailout for Ghana to combat the country’s economic crisis.

The International Monetary Fund's executive board has approved a long-awaited $3 billion bailout for Ghana in hopes of combating the country's economic crisis.

The arrangement will allow for the immediate release of $600 million, with the remaining funds to be made available over the course of the next three years, the IMF said in a statement Wednesday.

Facing soaring inflation, high debt and a weakening currency, Ghana's government began negotiations with the IMF last July for a bailout package. In December, the IMF agreed after a two-week visit to the West African country.

The IMF funds should help Ghana emerge from a financial crisis exacerbated by the COVID-19 pandemic but will require changes to the country's tax system and public spending.

“The combination of large external shocks and preexisting fiscal and debt vulnerabilities precipitated a deep economic and financial crisis in Ghana,” IMF Managing Director Kristalina Georgieva said in a statement.

The government has launched changes that will “focus on reining in inflation and rebuilding foreign reserve buffers,” she added.

Inflation in Ghana reached 41.2% in April, falling from a more than 20-year high of 54.1% in December, but still well above the central bank's target of 6% to 10%, according to Trading Economics, which provides global economic information.