The Ghanaian government has gone bankrupt after failing to pay billions of dollars it owed foreign creditors last December, according to a report by The New York Times.
President Nana Akufo-Addo’s government “had no choice but to agree to a $3 billion loan from the lender of last resort, the International Monetary Fund,” noted the paper, underpinning Ghana’s fall into dire financial straits, with government entities owing billions to contractors and facing a mounting debt crisis.
Emmanuel Cherry, the chief executive of an association of Ghanaian construction companies, recently revealed that government back payments to contractors amounted to a staggering 15 billion cedis, approximately $1.3 billion, before interest, said the media outlet, pointing out that the financial crisis has had far-reaching consequences, with many contractors laying off workers, exacerbating the country’s unemployment problem.
The Ghanaian government reportedly owes independent power producers $1.58 billion and faces the threat of nationwide blackouts.
“The government is essentially bankrupt,” stated the report. “It was the 17th time Ghana has been compelled to turn to the fund since it gained independence in 1957. This latest crisis was partly prompted by the havoc of the coronavirus pandemic, Russia’s invasion of Ukraine, and higher food and fuel prices.”
