The government has temporarily stopped paying a number of foreign obligations to organisations that have extended loans to the nation.
These obligations include commercial term loans, the majority of Ghana's bilateral debts, and bonds denominated in dollars that have been issued on the international financial market (Eurobonds).
It will enable the government to once more reorganise the various Eurobonds and commercial loans—including those to state-owned enterprises—on the country's books in order to make them more manageable and their servicing viable.
Holders of the impacted debts would be contacted in due time so that restructuring solutions may be provided for their consideration, according to a statement released by the Ministry of Finance yesterday.
It emphasised, however, that the suspension would not have an impact on the repayment of multilateral debts, which are loans obtained from major lending organisations like the World Bank, the International Monetary Fund (IMF), the African Development Bank (AfDB), the European Development Bank, the Organization for Economic Cooperation and Development (OECD), and the United Nations Development Program (UNDP).
Additionally, it stated that it would not apply to any debts incurred after yesterday or debts owed in connection with specific short-term trade facilities.
Additionally, we are assessing some specific loans connected to the projects that will have the greatest socioeconomic impact on Ghana and may need to be excluded.
According to the statement, "This suspension is an emergency step in the interim pending future arrangements with all relevant creditors."
Rationale
The suspension will provide the government some breathing room as it restructures the foreign loans to make their servicing sustainable.
It is one of the emergency steps taken to stop the country's economic, financial, and social crisis from getting worse.
Engagement
The statement went on to say that the government was prepared to hold talks with all of its foreign creditors in order to make Ghana's debt manageable through a fair, transparent, and thorough debt restructuring exercise in accordance with global best practises.
It stated, "An investor presentation will be held by the Ministry of Finance at a date to be disclosed at a later time.
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