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Ghana's repayment moratorium may complicate debt talks

Thursday, December 29, 2022

Significance

The decision applies to Ghana’s Eurobonds, commercial term loans and most of its bilateral debt. It does not apply to multilateral debt. The government, which reached a staff-level agreement for a USD3bn loan with the IMF on December 12, contends that current debt levels are unsustainable.

Impacts

  • The cedi remains vulnerable to more volatility which could fuel even higher food inflation and social discord.
  • Sustained high interest rates could introduce strains into the banking industry by increasing non-performing loans.
  • Austerity measures could generate unrest and strengthen the opposition's chances in the 2024 elections.

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