Thu. Jun 1st, 2023

Ghana suspends foreign debt payments, risk of default

Accra (Daily Pakistan Online) The West African nation of Ghana on Monday suspended most of its external debt payments, as the country struggles to meet its balance of payments deficit and is reportedly on the brink of bankruptcy.

Ghana’s finance ministry has said it will not repay loans, including its Eurobonds, commercial loans and most bilateral loans, in what it calls a ‘temporary emergency measure’. The Ministry of Finance said the government is “ready to engage with all its external creditors to make Ghana’s debt sustainable.”

The suspension of debt payments reflects the deteriorating state of the economy, which helped the government reach a $3 billion staff-level agreement with the International Monetary Fund (IMF) last week, according to news agency Reuters. Who was Ghana had already announced a domestic debt swap program and said external restructuring talks were underway with creditors. The IMF has said comprehensive debt restructuring is a condition of its support.

The country has struggled to refinance its debt since the start of the year, after being downgraded by several credit rating agencies on concerns that it would not be able to issue new eurobonds. Ghana’s total debt in September was 467 billion Ghana cedis ($55 billion), of which 42 percent is internal debt.

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