With 40% inflation, Ghana is experiencing its worst economic crisis in decades. Its debt is 80% of its GDP, and the first round of restructuring measures was announced on December 6, followed by an agreement with the IMF for a $3 billion financing program.
However, Ghana announced on Monday that it would suspend payment on a portion of its external debt.
These are “additional emergency measures,” according to a press release from the Ministry of Finance.
According to the authorities, the external debts affected by the payment suspension are Eurobonds, commercial term loans, and most bilateral debts.
Conversely, Ghana specifies that it will continue to repay debts contracted after December 19, including multilateral debt and debts specifically linked to projects with a significant socioeconomic impact in the country. The goal is to keep the country’s economic, financial, and social situation from deteriorating. Financial resources, including the international reserves of the Bank of Ghana, are limited, warns the Ministry of Finance and must be “preserved at this critical stage”.
“A temporary emergency measure ”
“This suspension is an interim emergency measure pending future agreements with all relevant creditors,” the authorities of Ghana further indicate. They say they are ready to engage in discussions with all their creditors for a debt restructuring exercise that they want to be ” fair, transparent and complete ” and announce an upcoming presentation to investors.