Aid and campaign groups, including Oxfam and Christian Aid, have called on the international community to cancel a large portion of Ghana’s debts as it struggles to deal with the worst economic crisis in the country’s history only a few months before it is due to host the African Games in Accra.
Ghana’s consumer inflation rose to a record 54 per cent year-on-year last month, driven by rising fuel, utility and food costs.
The country’s international reserves have dwindled to less than two months of import cover.
“The people of Ghana have suffered extensively from the crisis,” the groups, which all have operations in Ghana, said in an open letter on Wednesday.
“Wealthy private lenders must share in the costs of a crisis they helped to create and cancel the debt.”
Ghana’s Government asked to restructure its bilateral debt under the G20 common framework platform – launched in 2020 to help coordinate debt reprofiling and restructuring – this month after announcing it would default on most of its external debt at the end of last year.
Ghana missed a $41 million (£33 million/€38 million) interest payment due on a $1 billion (£809 million/€923 million) Eurobond on Wednesday (January 18).
Last October, former Ghanaian President John Mahama urged his country to pull out of staging the African Games “if it is not too late”.
Mahama, who led Ghana from 2012 to 2017, warned that the Games would “severely stretch our already precarious finances by hundreds of millions of Cedis”.
But last month, following a visit by the International Monetary Fund (IMF) when an agreement for $3 billion (£2.4 billion/€2.8 billion) rescue package was agreed, current President Nana Akufo-Addo agreed to release funds to complete infrastructure projects for the Games, due to take place between August 4 and 19.
Ghana’s Ministry of Finance have revealed that interest payments have risen from 70 per cent to 100 per cent of Government revenue.
“Ghana’s lenders, particularly private lenders, lent at high-interest rates because of the supposed risk of lending to Ghana,” the aid groups’ letter said.
“Given that they lent seeking high returns, it is only right that following these economic shocks, private lenders willingly accept losses.”
Signatories of the letter, which also include Caritas Ghana, Debt Justice and ActionAid, warned that the key challenge was to get private lenders to agree to a significant debt cancellation.
“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,” they said.
