Ghana has appealed to the World Bank and the International Monetary Fund (IMF) for concessional loans to revive its economy. With private sector funding drying up, the country is looking to secure a loan on more favourable terms than it could obtain in the marketplace. Concessional terms may include lower interest rates or deferred repayments, which would help to ease the country’s economic burden.
During an interaction with the Director General of the World Trade Organization, President Akufo-Addo emphasised that the state of Ghana’s economy makes it difficult to go to the capital market to borrow. As a result, he pleaded with the Bretton Woods institutions to act in the interest of struggling economies.
The call for concessional loans comes as Ghana faces a range of economic challenges, including high public debt levels and low revenue generation. The country has also been grappling with the economic fallout of the Covid-19 pandemic, which has had a significant impact on its economy.
In response to the call for assistance, the Director General of the World Trade Organization, Dr. Ngozi Okonjo-Iweala, urged struggling economies to readjust how they have been conducting their affairs. She emphasised the importance of building resilience in global supply chains and urged Ghana to position itself as a possible destination for manufacturing.
Dr. Okonjo-Iweala also spoke about the need for “re-globalisation”, in which countries look beyond traditional manufacturing hubs and consider other developing nations as possible destinations for manufacturing. She encouraged Ghana to consider attracting investment and positioning itself as a key player in global supply chains.
In recent years, Ghana has been working to attract investment and position itself as a gateway to West Africa. The country has implemented a number of reforms aimed at improving the business environment, including the establishment of a one-stop shop for business registration and the digitisation of land registration processes.
Despite these efforts, however, Ghana’s economic challenges persist. The country’s public debt has continued to rise, reaching over 70% of GDP in 2021. Additionally, revenue generation remains low, with the country relying heavily on commodity exports such as gold, cocoa, and oil.
In the face of these challenges, the call for concessional loans highlights the urgent need for external support to help revive Ghana’s economy. While it remains to be seen whether the World Bank and IMF will grant the requested loans, the call for assistance underscores the importance of international cooperation and solidarity in the face of global economic challenges.