CEM REPORT, ECONOMY | Amidst high debt, the African Development Bank (AfDB) has signed a $102.6 million grant facility with Ghana.
The grant which is part of an ongoing extended credit facility with the International Monetary Fund is to support Ghana’s fiscal consolidation and economic recovery programme.
According to AfDB’s representative Eyerusalem Fasika said in a statement reported by Reuters, “the program will facilitate the government’s economic recovery reforms through enhanced public finance, increased productivity, and job creation.”
Ghana, which is grappling with the mounting expenses of its domestic debt and has been barred from foreign financing markets, is in talks with bilateral and commercial creditors to restructure its debts.
Ghana’s public debt increased by GH¢27.7 billion since January 2023, according to a September 2023 report by the Bank of Ghana.
Ghana’s external debt accounted for GH¢328.6 billion (US$29.9 billion), while domestic debt accounted for GH¢246.9 billion ($30.8 billion).
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Several African countries like Nigeria are grappling to stay afloat with several debts. These countries spend at least half of their revenue on debt servicing.
With dwindling revenue and a harsh economic climate, African countries are seeking debt restructuring and lower interest loans to stabilise their economies.