Ghana Suspends Paying Some Foreign Debt Amid Economic Woes

The country has suspended payments on its Eurobond, commercial term loans, and on most of its bilateral debt, a week after a U.S. $3 billion agreement with the International Monetary Fund (IMF).

Ahead of the new decision, Ghana last week announced a domestic debt exchange programme. A statement from the Ministry of Finance said the new move was aimed at bringing the country's unsustainable debt level under control after its economy had been hit by high inflation, depreciating currency and low revenue.

The country spent between 70% to 100% of government revenue on debt payment, and its foreign reserves stood at around U.S.$6.6 billion at the end of September 2022, able to cover less than three months of imports.

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-19 pandemic and the war in Ukraine.


The Tetteh Quarshie Interchange in Accra (file photo).

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