After several years of intensive money borrowing, Ghana is now debt-trapped and wading through its worst economic crisis in a generation, with a current external debt portfolio exceeding $30 billion.
The (IMF), has revealed details about how Ghana’s four collateralized loans from China have exposed the country to losing parts of its mineral resource revenue in addition to electricity sales.
For Ghana, Chinese loans have been a reliable funding source four major projects since the year 2000. In two decades, Accra has racked up close to $5 billion from at least 41 Chinese loans.
This loan agreement means in the event Ghana defaults on honouring its debt obligation, China has the right to use proceeds from Ghana’s oil, cocoa, bauxite or even the sales from electricity to settle the debt.
In a lot of debt negotiations taking place within the developing world, China appears to be the most important party at the negotiation table. Although it is the largest bilateral lender in the world, it is opaque about its lending policies and how it renegotiates with distressed customers.
According to the World Bank, the planet’s poorest countries faced $35 billion in debt-service payments to official and private sector creditors in 2022, of which 40% was due to China alone.
As Ghanaians plead not to fall in default like Zambia as our debts keeps engulfing us, Ghanaians plead not to fall I default to serve a severe consequence of Ghana being overtaken by the Chinese government.
By Rachael Shieley
