The Government of Ghana is facing a severe debt crisis, with Trafigura’s Ghana Power Generation Company (GPGC) demanding immediate payment of $111 million in outstanding arrears.
In a sternly worded letter to Finance Minister, Dr. Mohammed Amin Adam, GPGC warned that it may seize Ghana’s properties in South Africa and the United States if the debt remains unpaid.
Background of the Dispute
The origins of this dispute date back to 2018, when Ghana unilaterally terminated a power purchase agreement with GPGC.
The company subsequently took the matter to a UK tribunal, which ruled in its favor, awarding $134 million in damages. Ghana has since paid $23 million, leaving a balance of $111 million.
Previous Enforcement Action
This is not the first time Trafigura has taken drastic measures to recover its debt.
In August 2024, the company briefly seized Ghana’s Regina House in the United Kingdom due to default on a payment agreement.
The move sent shockwaves through Ghana’s financial circles, highlighting the gravity of the situation.
Ghana’s Debt Woes
Ghana’s debt crisis is a growing concern, with the country’s debt-to-GDP ratio exceeding 70%.
The government’s inability to pay its debts has raised concerns among economists, who warn that developing economies like Ghana may struggle to repay debts incurred during the COVID-19 pandemic.
Source: Dailyguide
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