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Business News of Friday, 22 October 2021


Undertake fiscal consolidation to sustain debt vulnerability – IMF to African governments

The International Monetary Fund The International Monetary Fund

• Ghana’s debt stock is likely to hamper economic growth efforts

• The IMF is warning African countries to undertake fiscal consolidation measures

• Repayment of interest loans is affecting governments resources

African governments have been tasked by the International Monetary Fund to undertake fiscal consolidation to sustain their debt vulnerability.

The Bretton Woods Institution in its October 2021 Regional Economic Outlook report expressed concern over the rising high debts of African countries which could hamper economic recovery efforts.

Head of Communications at the Fund, Abebe Aemro Selassie at a briefing said “Half of sub-Saharan Africa’s low-income countries are either in or at high risk of debt distress. And more countries may find themselves under future pressure as debt-service payments account for an increasing share of government resources.”

“For most countries, urgent policy priorities include spending prioritization, revenue mobilization, enhanced credibility, and an improved business climate,” Abebe Selassie added.

In addition, the Fund said African countries are likely to struggle to repay their loans as interest payments which are affecting many government’s resources.

Also, the IMF has predicted that public debt among African countries is set to decline in 2021 though expected to remain high as compared to pre-COVID-19 pandemic levels.

Meanwhile, on the West Africa continent, Ghana’s public debt stock is one of the highest. For the period ending July 2021, Ghana’s debt stock stands at around GH¢336 billion.

A figure that could hamper economic growth and COVID-19 recovery efforts.

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