Ghana to default on most external debt as economic crisis worsens
Written by Olarotimi Oshin on December 19, 2022
The Ghanaian government says it has suspended all debt service payments under “certain categories of its external debt”.
The country’s ministry of finance made the announcement today.
It said the suspension will include eurobonds, commercial term loans and most of its bilateral debt, pending future agreements with all relevant creditors.
According to the West African nation, the measures were necessary to prevent a further deterioration in the economic, financial, and social situation of the country.
It could be recalled that on the 5th of December, Ghana, launched a domestic debt exchange programme to restore public debt sustainability. But the ministry said given the magnitude of the economic and social crisis that Ghana is confronted with, the domestic debt operation would not be enough to close the large financing gaps that the country faces over the coming years.
According to the statement, the government’s debt sustainability analysis (DSA) has demonstrated that its public debt, both external and domestic, is unsustainable.