Ghana engaging China for possible debt cancellation; China holds majority of Ghana's external bonds

Ghana has moved to the next stage of handling the government's debts internationally and has initiated talks with China over Ghana’s debt following a successful Domestic Debt Exchange Programme (DDEP).

The Minister of Finance, Ken Ofori-Atta, has told Citi News that negotiations with China are important because China holds the majority of the external bonds.

Mr Ofori-Atta says he will lead a delegation to China to plead for debt cancellation.

“The big elephant in the room is China, we will be visiting China by the end of the week to really discuss how they come into the envelope as quickly as possible. So we are looking at that support from them. China represents about a third of the $5.7 billion loan and so it is important that we engage them,” he said.

In January 2023, the International Monetary Fund (IMF) said it was working towards a debt cancellation programme for Ghana and other countries amid a global economic recession scare in 2023.

The other countries are Ethiopia, Zambia, Chad, Lebanon, Surinam, and Sri Lanka.

The move, Madam Kristalina Georgieva, the IMF Managing Director, said was to avert any “bad surprise” on the global economy, out of which 25 percent had its trade in emerging markets territories.

“We’re working hard to press for debt resolution for these countries, and we’ve engaged with the traditional creditors, the Paris Club, the non-traditional creditors, China, India, and Saudi Arabia. Our call is very simple: Urgently we have to act,” she said in an interview.

credit: Citi News