Ghanaian Govt Halts Payments on Most External Debt: Ghana
press release
Accra — Ghana is today faced with major economic and financial crisis, and its attendant social challenges. In 2020 and 2021, the covid-19 pandemic negatively impacted our fiscal and economic situation. Global risk aversion triggered large capital outflows, a loss of external market access and rising domestic borrowing costs.
This year, 2022, the global economic shock induced by the Russian invasion of Ukraine has further adversely affected our economy just when it was beginning to recover from the pandemic. The combination of adverse external shocks has exposed Ghana to a surge in inflation, a large exchange rate depreciation and stress on the financing of the budget. These factors taken together have put the sustainability of our debt at risk.
To address these mounting challenges, we launched on Monday 5th December an invitation to exchange our domestic debt. The details of this domestic debt exchange are set forth in an Exchange Memorandum, available on https://mofep.gov.gh/news-and-events/debt-operations. This domestic debt operation is part of a more comprehensive agenda to restore public debt sustainability.
We, therefore, formally requested IMF assistance in July 2022. A Staff-Level Agreement has subsequently been achieved and announced on 13th December on a financing program aimed at restoring macroeconomic stability and debt sustainability, and preserving financial stability while protecting the most vulnerable. This SLA milestone was achieved in record time.
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