The Dean of the School of Business at the University of Cape Coast, Prof. John Gatsi has termed the government's unilateral move to postpone foreign debt payments as risky and one that might undermine the country's rating.
On Monday, December 19, Finance Minister Ken Ofori-Atta stated that the suspension of external obligations will cover payments on Ghana's Eurobonds, commercial term loans, and the majority of the country's bilateral debt.
According to Mr. Ofori-Atta, the suspension would not affect payments on Ghana's multilateral debt, new loans (whether multilateral or otherwise) committed after December 19, 2022, or debts relating to specific short-term trading facilities.
"We are also assessing some particular loans relating to projects with the highest socio-economic benefit for Ghana which may have to be removed. This suspension is a temporary emergency measure awaiting future settlements with all relevant creditors," sections of a statement published by the Ministry of Finance stated.
Prof. Gatsi expressed his opinion on the matter, saying that the government should have spoken with their foreign creditors before suspending payments.
He warned the government to manage the suspension of foreign debt payments with sensitivity and adequate stakeholder participation, or else external creditors will avoid Ghana.
"You need to deal with them [external creditors] for them to accept your stance so that it becomes normal. If you do not engage your creditors, it looks that you believe you are in a superior position, which is where the problem lies.
"It should not be done unilaterally... If you simply cannot pay, you must contact the debt holders since the agreement states that you must pay whether you have money or not, and if you cannot pay, you must bargain."
Professor Gatsi went on to say that if Ghana's government rejects the suspension of foreign payments, the creditors may take legal action against the country.