After failing to make the billions of dollars in debt it had to foreign creditors in December, the Ghanaian government filed for bankruptcy.

The New York Times reported that President Nana Akufo-Addo’s administration “had no choice but to agree to a $3 billion loan from the lender of last resort, the International Monetary Fund,” which contributed to the explanation of Ghana’s financial crisis, in which government organisations owed billions to contractors and were in serious debt.

The media outlet claimed that the financial crisis has had a significant impact, resulting in numerous contractors terminating employees and worsening the nation’s unemployment issue.

Emmanuel Cherry, the head of a group of Ghanaian construction firms, recently revealed that the government owed contractors a whopping 15 billion cedis ($1.3 billion), before interest, in unpaid back payments.

According to the sources, Ghana’s government owes independent power producers $1.58 billion and faces the possibility of widespread power outages.

“The government is essentially bankrupt. It was the 17th time Ghana has been compelled to turn to the fund since it gained independence in 1957. This latest crisis was partly prompted by the havoc of the coronavirus pandemic, Russia’s invasion of Ukraine, and higher food and fuel prices,” the report read in parts.

In order to deal with Ghana’s debt, the IMF put up a detailed rescue strategy that included cutting spending, raising revenue, and safeguarding the most those with vulnerabilities while speaking with foreign creditors.

The matter would be a vital discussion point at the upcoming UN General Assembly. Another important concern would be the developing world’s rising debt burden, which is projected to reach above $200 billion.

According to the research, the latest IMF loan reduced currency fluctuations and increased trust, which helped stabilise the economy. Inflation has reduced from its peak of 54% in January, even if it is currently only about 40%.

The president of Ghana reported in May that the $3 billion (£2.4 billion) IMF bailout would not instantly solve the nation’s economic problems

The research quotes Tsidi Tsikata, a senior fellow at the African Centre for Economic Transformation in Accra, who questioned if Ghana would be able to avoid going through similar financial troubles despite the fact that the IMF’s programme addressed significant concerns.