More than two dozen charity and advocacy organizations have urged international creditors to erase a substantial chunk of Ghana’s debts as the country grapples with an economic crisis.
Consumer inflation in Ghana reached a new high of 54% year on year in December, owing to increased gasoline, electricity, and food prices. International reserves have shrunk to fewer than two months’ worth of imports.
“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.”
After declaring that it will default on most of its external debt at the end of last year, the government asked to restructure its bilateral debt through the G20 common framework platform, which was introduced in 2020 to help coordinate debt reprofiling and restructuring.
Ghana is poised to miss a $41 million interest payment on a $1 billion eurobond due on Wednesday. According to the Ministry of Finance, interest payments have grown to 70 percent to 100 percent of government earnings.
“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,” it argued.
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.
“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.
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 called the domestic debt exchange has been extended three times as authorities struggle to entice bondholders to participate in the programme.
