Ghana Suspends Part Of The Payment Of Its External Debt

Ghana is going through the worst economic crisis in decades, with 40% inflation. Its debt amounts to 80% of its GDP and a first series of restructuring measures was announced on December 6, followed by an agreement with the IMF for a financing program of 3 billion dollars. But this Monday, Ghana announced the suspension of payment of part of its external debt.

These are “ additional emergency measures ”, explains the Ministry of Finance in a press release. The authorities specify that the external debts concerned by the suspension of payment are Eurobonds, commercial term loans and the major part of bilateral debts.

Ghana specifies, however, that it will continue to repay the debts contracted after December 19, the multilateral debt or even certain debts specifically linked to projects with a strong socio-economic impact in the country. The objective is to prevent further deterioration of the country’s economic, financial and social situation. 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.