Ghana, fresh from a tough debt restructuring process, is now locked in a dispute with the African Export-Import Bank (Afreximbank).
- Ghana is in conflict with Afreximbank regarding the restructuring of a $768.4 million debt.
- The Finance Ministry of Ghana seeks equal treatment of Afreximbank’s loan with other restructured debts.
- Afreximbank insists on preferred creditor status to avoid losses during restructuring.
Ghana, fresh from a tough debt restructuring process, is now locked in a dispute with the African Export-Import Bank (Afreximbank), one of its largest commercial creditors, over a $768.4 million debt.
The Ghanaian Finance Ministry wants Afreximbank’s loan to be treated like other debts it has already restructured, such as bilateral loans from China and $13 billion worth of eurobonds, Bloomberg reported.
In restructuring, lenders often agree to extend payment deadlines, reduce interest rates, or take partial losses (called “haircuts”) to help a struggling country recover.
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But Afreximbank says it should not have to take any losses. The Cairo-based bank says it holds “preferred creditor status,” a designation usually given to institutions like the International Monetary Fund (IMF) or World Bank.
This status means that their loans are repaid in full, ahead of other creditors, and are not subject to restructuring.
According to the Minister of Finance, Cassiel Ato Forson, “Ghana’s government doesn’t see Afreximbank as having preferred creditor status, we do not believe that their debt is senior to any other restructurable debt. The Afrexim debt is part of our restructurable envelope.”
A dispute with regional implications
The disagreement could delay Ghana’s debt resolution, which began after it defaulted in December 2022.
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More importantly, it could set the tone for how regional lenders like Afreximbank are treated in future debt talks, not just in Ghana but in other African countries facing financial distress, such as Zambia, Kenya, and Ethiopia.
Zambia, for example, has faced multiple hurdles in trying to restructure its debt under the G20’s Common Framework, a global plan launched during the COVID-19 pandemic to help poor countries renegotiate unaffordable debt.
Despite its good intentions, the Framework has struggled with implementation and coordination among creditors.
Afreximbank, which is owned by African governments and private investors, has also shown it’s willing to enforce its claims through legal means.
On May 8, it won a court case against South Sudan, forcing the country to repay $657 million in defaulted loans, plus 13.5% post-judgment interest. The move sent a strong message that the bank will pursue repayment, even from fellow African states.
The bank says its loans are governed by its founding treaty, not outside rules.
