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Ghana’s government declares bankruptcy

The Ghanaian government filed for bankruptcy after failing to pay the billions of dollars in debt it owes to foreign creditors in December.

 

The government of President Nana Akufo-Addo allegedly “had no choice but to agree to a $3 billion loan from the lender of last resort, the International Monetary Fund,” according to the New York Times, which helped to explain Ghana’s financial crisis, in which government organizations allegedly owed contractors billions of dollars and were deeply in debt.

According to the media site, the financial crisis had a tremendous influence, leading to countless contractors firing workers and escalating the unemployment problem across the country.

In essence, the government is bankrupt. It was the 17th time since Ghana’s independence in 1957 that it had to use the fund. According to the report, the devastation caused by the coronavirus pandemic, Russia’s invasion of Ukraine, and increasing food and gasoline prices were some of the factors that contributed to this most recent catastrophe.

The chairman of a consortium of Ghanaian construction companies, Emmanuel Cherry, recently said that, before interest, the government owed contractors a whopping 15 billion cedis ($1.3 billion) in delayed back payments.

The sources claim that Ghana’s government owes independent power producers $1.58 billion and may face bankruptcy.

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