Groups call for private lenders to share in costs of Ghana’s economic crisis
More than two dozen aid and campaign groups have called on international creditors to cancel a large portion of Ghana’s debts as the country struggles to contend with an economic crisis.
Ghana’s consumer inflation rose to 54.1% year-on-year in December, driven by rising fuel, utilities and food costs. International reserves have dwindled to less than two months of import cover.
In an open letter, the groups, which all have operations in Ghana, stated, “The people of Ghana have suffered extensively from the crisis. Wealthy private lenders must share in the costs of a crisis they helped to create and cancel the debt.”
The government of Ghana has asked to restructure its bilateral debt under the G20 common framework platform earlier this month, after announcing it would default on most of its external debt at the end of last year.
Ghana is expected to miss a $41m interest payment due on a $1bn eurobond on Wednesday.
The finance ministry said in December that interest payments have risen to between 70% and 100% of government revenue.
Signatories of the letter, which included Oxfam, Christian Aid, Caritas Ghana, Debt Justice and ActionAid, said the key challenge was to get private lenders to agree to a significant debt cancellation.
They added, “The G20 can help by making clear that Ghana will be politically and financially supported to remain in default on any creditor which does not accept the necessary debt restructuring.”
Ghana launched a domestic debt swap plan at the start of December, days before clinching a staff-level agreement with the International Monetary Fund (IMF) for a $3bn rescue package.
The IMF has said its board will approve the deal only if Ghana undergoes comprehensive debt restructuring. The deadline to register for what has been dubbed the Domestic Debt Exchange has been extended three times, as authorities struggle to entice bondholders to participate in the programme.
The economic crisis in Ghana continues to worsen, with citizens feeling the brunt of the high inflation and dwindling reserves.
It remains to be seen if international creditors will heed the calls of aid and campaign groups for debt cancellation to provide relief for the country.
