© Reuters. FILE PHOTO: People walk in the street around the Kwame Nkrumah circle in Accra, Ghana, December 2, 2016. REUTERS/Luc Gnago/File Photo
ACCRA (Reuters) – Ghana began negotiations with the International Monetary Fund on Monday over an IMF-backed loan program, the government said in a statement, in a bid to ease economic hardship. prompted street protests.
The IMF staff team is discussing policies and reforms with officials at Ghana’s finance ministry and central bank after the West African country requested a loan from the Fund in July.
The government of Ghana, a major producer of gold and cocoa, has struggled to contain hyperinflation, reduce public debt and appreciate the local currency. Its balance of payments deficit widened to nearly $2.5 billion at the end of June from about $935 million in March.
The IMF mandate is scheduled to last until October 7.
“An important prerequisite for a program is confirmation that Ghana’s debt is on a sustainable path,” the Treasury said, adding that a Debt Sustainability Analysis was underway.
The government is also working on a post-Covid-19 economic program that will form the basis of negotiations with the IMF. The program will aim to secure debt and macroeconomic stability through key structural reforms and social protection, the statement added without further detailing.
Ghana’s central bank moved its upcoming interest rate decision to October 7 from September 26 last week to coincide with the end of the mandate.