This content was published on December 19, 2022 – 1:39 PM December 19, 2022 – 1:39 PM
Accra, 19 December (EFE)
“Due to the current situation, our financial resources, including the Bank of Ghana’s international reserves, are limited and must be preserved at this critical time,” the finance ministry said in a statement released Monday.
The ministry announced the “suspension” of payments on “our Eurobonds, our commercial term loans and most of our bilateral debt”.
“Additional emergency measures are necessary to prevent further deterioration of the economic, financial and social situation in Ghana,” the document added.
According to the Treasury Department, it is “a temporary emergency measure and pending future agreements with all relevant creditors”.
The suspension will not affect payments of the Ghanaian government’s multilateral debt completed after December 19 this year and payments related to some short-term commercial services.
The country is going through a deep economic crisis, which has already sparked major protests on the streets.
The Ghanaian government blamed the economic impact of the coronavirus pandemic and Russia’s invasion on Ukraine for this situation.
“The combination of adverse external shocks exposed Ghana to rising inflation rates, a sharp devaluation of our currency and difficulties in funding our budgets,” he said.
The country’s debt – which accounts for more than 78% of its gross domestic product (GDP) – forced the government to request an economic bailout from the International Monetary Fund (IMF) in July.
According to the Ghanaian government, the country last week agreed a $3,000 million bailout with the IMF to improve its economic situation.
Earlier this month, Ghana’s finance minister, Ken Ofori-Atta, acknowledged that Ghana’s public debt is “unsustainable” and “the government may not be able to fully service its debt going forward unless steps are taken”.
Aiming to secure an agreement with the IMF, the government proposed restructuring its public debt with an exchange of the terms originally agreed.
The country’s unions, pension fund managers and Ghana’s main political opposition party, the National Democratic Congress (NDC), have opposed it, saying it will have a negative impact on the population.
Inflation in Ghana rose to over 40% last October and its currency (the cedi) has lost 53% of its value so far this year, making it one of the worst performing currencies in the world.
One of Africa’s most mature democracies, Ghana, once seen as a model for economic stability and security in a region devastated by coups and jihadist violence, has gradually lost investor confidence. EFE
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