How Once-Thriving Ghana Was Forced to Seek a Bailout

When Ghana joined the ranks of oil and gas exporting nations in late 2010, it helped turn the West African country into one of the continent’s top investment destinations. Unfortunately, it also prompted successive governments to borrow to the hilt. In 2022, doubts over the country’s solvency turned into full-blown panic, investors dumped Ghana’s bonds and currency, and the government was forced to suspend interest payments on its external debt. Now the government hopes to turn a new page after agreeing with private creditors on a plan to restructure $13 billion of eurobonds.

The first sub-Saharan African nation to gain independence after colonial rule, Ghana has been a bastion of stability in a region plagued by civil unrest and coups. Peaceful elections have been held regularly since the 1990s, power has changed hands between rival parties and presidents, and there is an independent judiciary and a vibrant parliament. The country is the world’s second-biggest grower of cocoa and Africa’s No. 1 gold producer. A year after it began exporting oil, gross domestic product leaped by almost 14%. The economy has expanded every year since then, albeit at a more modest pace, with the government’s embrace of a free-market system helping to lure foreign capital and financing.