Ghana parliament approves $750 mln loan to support budget

Ghanaian lawmakers on Wednesday approved a $750 million loan from African Export Import Bank (Afreximbank) and continued to debate another loan worth $250 million, as the country seeks to overcome a nearly $1 billion balance-of-payments deficit.

In June, Finance Minister Ken Ofori-Atta asked parliament to expedite approval of the loans, but disagreements have held up the process even as the country faces soaring inflation, lacklustre growth and a tumbling local currency. The loan of up to $750 million has a seven-year tranche split into 100 million euros ($102.19 million) with a total interest rate of 6.49%, including fees, and $101 million at 9.55%.

A second 10-year tranche of $350 million has a rate of 9.33%, according to a report by a Ghanaian parliamentary committee. Ghana needs the cash.

With inflation at 29.8% in June, a debt-to-GDP ratio up to almost 85%, and the cedi currency losing nearly a quarter of its value this year, the government has also had to turn to the International Monetary Fund (IMF) for help stabilising the economy. An IMF team visited Ghana earlier this month, but has not yet agreed a support package with the government.

The crisis has led to protests in the capital Accra and a bitter standoff with public sector workers over pay.

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