Ghana announced it will suspend payments on most of its debt to bondholders, other commercial lenders, and foreign governments, officially putting it in default. The announcement comes a week after a staff-level meeting with the IMF and a ratings downgrade. Ghana’s economy is spiraling, with 70%-100% of government revenue going to debt servicing and domestic inflation hitting 50%, triggering protests.
Out of its $28.4 billion external debt, $1.9 billion is owed to China, only about 6.7%. In contrast, Eurobond debt makes up 46.1% ($13.1 billion.) Bondholders said the relatively small share of Chinese debt will likely smooth the debt restructuring process, in contrast to countries like Zambia.
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