IMF mission to visit Ghana to begin talks on programme

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FILE PHOTO: International Monetary Fund logo is seen outside the headquarters building

By Karin Strohecker and Rachel Savage

LONDON (Reuters) -A staff mission from the International Monetary Fund will visit Ghana from July 6-13 to begin initial discussions about a possible programme, the Fund said in a statement on Tuesday.

Ghana, one of West Africa’s largest economies, had said on Friday it would hold formal talks with the IMF after hundreds of people took to the streets to protest against worsening economic hardship. It had previously refused to seek IMF support.

“We are at an early stage in the process, given that detailed discussions are yet to take place,” the IMF’s mission chief for Ghana, Carlo Sdralevich, said in the statement.

Ghana’s finance ministry said in a statement on Tuesday that it was seeking IMF help to shore up its currency and foreign reserves as a precaution against “the possibility of a fully blown crisis”.

It blamed the COVID-19 pandemic and Russia’s war in Ukraine for its balance of payments problem and said it hoped IMF support would mean it could access international capital markets again “sooner rather than later”.

Central bank governor Ernest Addison said in May that Ghana faced an overall balance of payments deficit of $934.5 million in the first quarter of this year, compared with $429.9 million in the same period in 2021.

Ghana’s Eurobonds rallied on the news of the IMF visit dates, with the 2026 maturity up 1.4 cents in the dollar at 1338 GMT, according to Tradeweb data, although the yield was still above the level where new debt is affordable, at more than 19%.

Ghana’s bonds had been among the worst performing in Sub-Saharan Africa this year, according to Refinitiv data, but started this week 6.6% higher than a month earlier, after the talks with the IMF were announced last week.

(Reporting by Karin Strohecker and Rachel Savage, Additional reporting by Cooper Inveen, Editing by Jorgelina do Rosario and Alex Richardson)

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