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Ghana Becomes Second-Most Indebted African Nation to IMF Amid Economic Crisis

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Ghana has emerged as the second-most indebted African nation to the International Monetary Fund (IMF) in terms of concessional lending, with outstanding loans totaling $2.914 billion as of October 31, 2024.

This figure accounts for 17% of Africa’s total borrowings from the IMF, highlighting the country’s heavy reliance on the global lender.

The Democratic Republic of Congo (DRC) remains the top debtor on the continent, with $2.256 billion SDRs in outstanding loans, while Zambia holds the third spot with $1.272 billion in loans.

This debt revelation comes amid Ghana’s ongoing struggle with a severe economic crisis, which prompted the government to seek a $3 billion bailout package from the IMF in January 2023. To date, Ghana has received $1.92 billion under the IMF’s Economic Credit Facility program, aimed at stabilising the country’s economy and addressing urgent fiscal imbalances.

Concessional lending, which involves loans extended to low-income countries at favorable terms (such as low-interest rates and extended repayment periods), is central to the IMF’s efforts to support economic development and poverty reduction in these nations. However, Ghana’s rising debt burden underscores the growing financial challenges facing the country, with both Zambia and Ghana having defaulted on their loans in recent years, making IMF assistance essential for their economic recovery.

The stark reality of Ghana’s indebtedness to the IMF raises concerns over the long-term sustainability of its economic policies, especially as the nation navigates a complex balance between debt repayment and the need for fiscal reforms. This situation has led to growing calls for transparent governance and a more robust strategy to tackle public debt, diversify the economy, and stimulate growth through domestic resources.

As Ghana continues to work through its IMF-backed economic recovery program, the international community will be closely watching how it manages its debt obligations and economic reforms.

Ghana becomes Africa’s second largest IMF Concessional Loan recipient
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