The Ghanaian government announced on Monday, April 15th, that a debt restructuring agreement had failed, dealing a significant blow to the country, once hailed as an economic powerhouse of the continent, now in default since 2022.
The Ghanaian government sought to shed thirteen billion dollars of external debt. However, disagreements over the approach and a failure to meet the debt sustainability parameters set by the International Monetary Fund led to the collapse of the agreement.
This failure comes after a year of discussions between the Ghanaian government and its private creditors, including international asset managers and African banks holding Ghanaian government bonds.
However, all hope is not lost. On Saturday, April 13th, the Finance Minister expressed confidence in reaching an agreement “when the time comes,” indicating a recurring situation since 2022, a bleak year marked by a drastic depreciation of Ghana’s currency and inflation exceeding 50%.
Two years later, Ghana continues to struggle with its external debt despite a $3 billion loan from the IMF in May 2023. This loan program is scheduled in several installments, with the third installment of $360 million expected to be disbursed soon. However, this will only happen if Ghana can provide sufficient financing assurances to honor another debt restructuring agreement, this time with official creditors.