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.
- 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.