Ghana Faces Bankruptcy After Failing to Pay Billions in Debt, Secures $3B IMF Bailout Amid Financial Crisis

Ghana faces bankruptcy after failing to pay billions in debt to creditors, prompting a $3B IMF bailout.
The financial crisis stems from COVID-19, the war in Ukraine, and rising costs of food and fuel.
Ghana's government owes contractors $1.3B and is at risk of widespread blackouts.
The IMF loan stabilizes the economy but questions remain if Ghana can avoid future financial troubles.
Ghana's growing debt load will be a key topic at the upcoming UN General Assembly.

businessinsider.com

Relevant topic timeline:

9/18/2023

Ghana Seeks 17th IMF Bailout Since 1957 Amid Spiraling Debt Crisis

Ghana, facing bankruptcy, has sought its 17th bailout from the IMF since 1957, highlighting the persistent cycle of crisis and bailout faced by many poor and middle-income countries, with the debt burden threatening economies and social progress.

10/5/2023

Ghana Faces Financial Crisis as Central Bank Loses Billions, Sparking Protests

Ghana is facing an unprecedented financial crisis as protestors demand the resignation of the governor of the Bank of Ghana over the loss of $5.2 billion, causing depreciation of the currency and crippling inflation. The government's mismanagement and failure to repay loans have led to a surge in debt, forcing them to approach the IMF for assistance. The crisis undermines confidence in the financial system and the central bank's authority.

10/17/2023

Ghana's Debt Restructuring Plan Seeks Deep Haircuts, Disappointing Investors

Ghana's sovereign dollar bonds experienced a sharp decline after the government proposed debt rework scenarios that would involve a 30% to 40% haircut on the principal, disappointing investors. However, the bonds later recovered slightly, though they remained down on the dollar; Ghana is in talks with creditors to restructure its debts during its severe economic crisis, aiming for a coupon of no more than 5% and a final maturity of not more than 20 years on new bonds.

10/18/2023

African Debt Crisis Looms Due to High Spending and Poor Risk Assessment, Experts Warn

African countries face debt distress because of insufficient action taken to manage their debt and reluctance to cut social spending, according to former Nigerian Minister of Finance, Kemi Adeosun, who emphasized the need for international mechanisms for debt restructuring.

Topics

Posted 9/20/2023, 9:35:34 AM