In response to fears of a global economic recession this year, the International Monetary Fund (IMF) says it is working toward a debt cancellation program for Ghana and other nations.
Ethiopia, Zambia, Chad, Lebanon, Surinam, and Sri Lanka are the additional nations.
IMF Managing Director Madam Kristalina Georgieva stated that the action was taken to prevent any “bad surprise” on the global economy, of which 25% of trade was conducted in emerging market regions.
“We’re working hard to press for debt resolution for these countries, and we’ve engaged with the traditional creditors, the Paris Club, the non-traditional creditors, China, India, and Saudi Arabia. Our call is very simple: Urgently we have to act,” she said in an interview.
Ghana has reached a Staff-Level Agreement (SLA) with the IMF and is currently undertaking a domestic debt restructuring program as well as engaging with its external creditors, subject to approval by IMF Management and the Executive Board.
The SLA is for a three-year program supported by an IMF arrangement under the Extended Credit Facility (ECF) worth approximately $3 billion.
It aims to restore macroeconomic stability and debt sustainability while also protecting the vulnerable, maintaining financial stability, and setting the stage for a strong and inclusive economic recovery.
On recession, the IMF Managing Director, said: “We expect one-third of the global economies to be in recession. Even countries that are not in recession, it would feel like a recession.”
She emphasized the need to act quickly and said: “For most of the world economy, this is going to be a tough year, tougher than the year we leave behind, therefore, we have to be concerned.”