Ghana Bankrupt, This is the Culprit

west africa

"Ghana Bankrupt, This is the Culprit"

This is the factor why that West African country went bankrupt.

Dream - The Ghanaian government has fallen into the abyss of bankruptcy, after failing to repay billions of dollars in debt to international creditors in December 2022. As a result, President Nana Akufo-Addo's administration had no choice but to agree to a loan of US$3 billion (approximately Rp46.2 trillion) from the last lender, the International Monetary Fund (IMF).

However, in May, the President of Ghana stated that the $3 billion IMF bailout fund would not instantly solve the country's economic problems. So what is the actual cause of Ghana's bankruptcy?

"In essence, IMF assistance will help the financial crisis in Ghana, where government organizations in the country are said to owe billions of dollars to contractors."

According to Business Insider, the financial crisis has had a widespread impact, with many contractors laying off workers, thereby exacerbating the unemployment problem in the country.

The Chief Executive of a construction company association in Ghana, Emmanuel Cherry, recently revealed that the government's repayment to contractors amounted to 15 billion cedis or approximately US$1.3 billion. This amount does not include interest.

The Ghanaian government also owes independent electricity producers a total of US$1.58 billion and is facing widespread power outages. In the report, this is the 17th time Ghana has had to request financial assistance from the IMF since its independence in 1957.

"The government is basically bankrupt. This is the 17th time Ghana has had to request financial assistance from the IMF since gaining independence in 1957. The recent crisis is partly triggered by the catastrophe of the corona virus pandemic, Russia's invasion of Ukraine, and the increase in food and fuel prices."

"demikian sebagian isi laporan tersebut." translates to "thus, some of the contents of the report."

IMF presents a comprehensive rescue plan to address Ghana's debt, control expenditure, increase income, and protect the most vulnerable populations, while negotiating with foreign creditors.

This problem will be a significant topic of discussion at the upcoming United Nations General Assembly. The increasing debt burden for developing countries, estimated to exceed US$200 billion, will also be a major topic of discussion. This report notes that recent IMF loans have helped stabilize the economy by reducing currency fluctuations and increasing confidence. Even with inflation still around 40 percent, it has decreased from its peak of 54 percent in January.

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