Its finance ministry said it will not service debts including its Eurobonds, commercial loans and most bilateral loans, calling the decision an "interim emergency measure", while some bondholders criticised a lack of clarity in the decision.

The government "stands ready to engage in discussions with all of its external creditors to make Ghana's debt sustainable", the finance ministry said.

The suspension of debt payments reflects the parlous state of the economy, which had led the government last week to reach a $3 billion staff-level agreement with the International Monetary Fund (IMF).

The IMF has said a comprehensive debt restructuring is a condition of its support. 

The government "stands ready to engage in discussions with all of its external creditors to make Ghana's debt sustainable", the finance ministry said.

Ghana economy slows to 2.9% year-on-year in Q3 2022 v Q3 2021

The country has been struggling to refinance its debt since the start of the year after downgrades by multiple credit ratings agencies on concerns it would not be able to issue new Eurobonds.

That has sent Ghana's debt further into distressed territory. Its public debt stood at 467.4 billion Ghanaian cedis ($55 billion) in September, of which 42% was domestic.

Ghana’s economy grew 2.9% year-on-year in the third quarter of 2022, compared with 6.6% in the third quarter of 2021, the country’s statistics service said on Wednesday.Economic growth has dropped since a post-COVID pandemic recovery in 2021 as Ghana grapples with runaway inflation, a depreciating local currency and spiralling debt.

It is expected to slow to 3.7 % in 2022 and to 2.8 % in2023, Finance Minister Ken Ofori-Atta said during his budget presentation last month.

Reuters