The government was forced to approach the International Monetary Fund (IMF) for assistance. To secure a $3bn bailout earlier this year, the government had to agree to fulfil a number of requirements.
The most crucial of these was to bring down the interest on the country’s debt to a reasonable level by 2028. They would still have enough money to maintain the economy after this.
In order to do this, the government of Ghana started the debt restructuring process by renegotiating conditions with its creditors and offering them longer payback dates and lower interest rates on their loans to ease the strain on the public finances.
Some creditors, however, declined to participate in this debt exchange arrangement.
The government informed the Bank of Ghana that it lacked the funds necessary to meet the IMF’s conditions and that it would therefore not pay back half of the $700 million it had borrowed from the bank, according to a statement the bank released on August 9.
Instead, the funds would be used to restructure the debt. It
The bank is the lender of last resort and experts say its status has been abused by the government, led by President Nana Akufo-Addo, and the rules of the bank have been broken.
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