Ghana's Economy
The 2022 Debt Default
How rising borrowing, COVID and high interest rates pushed Ghana into default in December 2022, the domestic debt exchange, and the $3 billion IMF programme.
Ghana defaulted in December 2022.
Build-up
- Heavy borrowing in Eurobond markets.
- Interest payments took a large share of revenue.
- COVID and the Ukraine war raised costs.
Crisis
- The cedi lost much of its value in 2022.
- Inflation exceeded 50%.
Default
Ghana suspended payments on most external debt.
Domestic debt exchange
Holders of local bonds, including banks and pension funds, had to swap for longer, lower-interest bonds.
IMF
A $3 billion IMF programme was approved in May 2023.
Recovery
Inflation fell and growth recovered by 2024-25.
The bond swap
A Ghanaian pension fund exchanges its government bonds for new ones paying less interest.
Thinking only foreign lenders lose in defaults
Local bondholders lost too.
Key takeaways
- Ghana defaulted in December 2022.
- Inflation exceeded 50%.
- Local bonds were exchanged.
- A $3 billion IMF programme followed.
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