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Accra Starts Tightening its Belt after IMF Deal

Ghana has temporarily suspended the payment of part of its external debt, including Eurobonds, as it seeks to restructure it after an agreement with the International Monetary Fund (IMF) last week. This measure aims to “prevent a further deterioration of the economic, financial and social situation of Ghana,” he said. Excluded from this suspension are the payment of multilateral debt and new debts contracted as of Monday. So last week the government signed a $3 billion bailout agreement with the IMF to shore up public finances. The agreement includes a debt restructuring. Many Ghanaians fear that the deal will force the government to impose further austerity measures that will further burden the population. With historic inflation of more than 50%, the collapse of the local currency by 50%, prices at the pump that have doubled and a debt whose repayment swallows half of the state revenue, Ghana is grappling with a serious economic crisis. It’s the worst in decades.