After securing a bailout package from the International Monetary Fund (IMF), Ghana now faces a challenging task of convincing creditors to provide over $22 billion in debt relief. This is no easy feat considering a significant portion of Ghana’s external debt is held by private lenders who are seeking full repayment. With 76% of Ghana’s external debt held by commercial lenders, including bondholders, reaching an agreement on debt relief becomes even more complicated, especially since Ghana is in default. Bondholders are particularly reluctant to offer concessions, and the geopolitical implications surrounding debt further complicate the negotiations.
To shed light on the intricate debt restructuring negotiations between Accra (the capital of Ghana) and its creditors, Professor Theophilus Acheampong, an economist and visiting Senior Fellow at the Africa Policy Research Institute, provides valuable insights.
Zimbabwe’s Dollarization Challenges
Zimbabwe has been grappling with economic collapse and inflation for years. In 2009, the country adopted a range of currencies, including the US dollar, to combat these challenges. However, in 2019, Harare reintroduced a local currency called the RTGS, which is now facing issues such as inflation and high interest rates. Manufacturers, retailers, and suppliers prefer settling transactions in US dollars, with only a small fraction being conducted in the local currency.
Africa’s Business Leaders Support AfCFTA
The African Continental Free Trade Area (AfCFTA) was established to boost intra-African trade. However, key business leaders, investors, and policymakers who gathered in Abidjan emphasized the need for a significant increase in local manufacturing to fully unlock the bloc’s potential. Agro-processing has been identified as one of the most promising sectors for growth within the AfCFTA.
