Ghana has suspended payments on most of its foreign debts, effectively defaulting as the country starts restructuring, as part of a bailout deal with the International Monetary Fund.

The finance ministry said Monday that it will suspend service payments of its Eurobonds, commercial loans and most bilateral loans.

Calling the decision an "interim emergency measure", the ministry said the government "stands ready to engage in discussions with all of its external creditors to make Ghana's debt sustainable".

A top cocoa and gold producer, Ghana also has oil and gas reserves, but its debt has soared this year, and like the rest of sub-Saharan Africa it has been hit by the fallout from the Covid pandemic and the war in Ukraine.

The government currently spends 70 percent to 100 percent of its revenue servicing its debt, and it has been struggling to refinance since the start of the year.

Street protests against rising costs of living and calls from the opposition for the removal of the finance minister have forced the government to reverse its position earlier this year and seek help from the IMF.

Last week, Ghana agreed on a $3 billion credit deal with the IMF, which has agreed to help on the condition that the country undergoes a comprehensive debt restructuring.

The IMF has reached a staff-level agreement with Ghana on a three-year arrangement of about $3 billion to support the country's s Post-COVID-19 Program for Economic Growth.Press Release: https://t.co/SjfKyL0CbGFAQ: https://t.co/2l14K7GLe4 pic.twitter.com/GmnEemU5Oi-- IMF Africa (@IMFAfrica) December 13, 2022

To address the Ghana's suspension of debt servicing, holders of its Eurobonds have formed a creditor committee, including Abrdn, Amundi (UK) Limited, BlackRock, Greylock Capital Management and Ninety One.

A separate committee of bilateral creditors is also likely, including China, which earlier this year agreed to co-chair with France a committee to help restructure Zambia's foreign debts.

(with wires)