Afreximbank has signalled that Ghana has kept up loan repayments to it, two sources told Reuters, potentially setting Accra on a collision course with its other lenders that have already agreed to take losses to help the country recover from default.
The African lender, the sources said, told investors on a May 15 call that Ghana and Malawi – which is also undergoing a debt restructuring – were "up to date" with their loan facilities, suggesting neither country had run up arrears.
While Ghana's restructuring of $13 billion worth of international bonds and debts to official creditors concluded last year, it must also restructure its commercial debt before it can fully emerge from default.
Afreximbank says it is a multilateral institution which, like the IMF and the World Bank, is exempt from taking losses when countries default.
Ghana said it would 'restructure Afreximbank loans'
But sources told Reuters last month that the Paris Club group of official lenders has made it clear that Ghana, and also Zambia which similarly agreed a deal with its primary creditors last year, must restructure their debts to Afreximbank and the Eastern and Southern African Trade and Development Bank (TDB).
Ghana said in a statement on Thursday that it remained in arrears with all external creditors eligible for restructuring and that no creditor had been treated preferentially. The government told Bloomberg last week that it would restructure the Afreximbank loans.
Afreximbank declined to comment beyond a May 21 statement saying it was not participating in debt restructurings with member countries.
Ghana defaulted in 2022, spurring the worst economic crisis in a generation against the backdrop of the COVID-19 pandemic, Russia's invasion of Ukraine and higher global interest rates.
Caught in the middle between creditors
The gold, cocoa and oil-producing nation owes Afreximbank at least $750 million, which, if counted as commercial debt, would make up almost a quarter of the country's near $4 billion of such loans, according to think tank ODI Global.
It is unclear when Ghana and Malawi were due to make payments to Afreximbank. The timing is particularly pertinent for Ghana after it included a clause in international bonds issued late last year as part of its debt rework stipulating it cannot treat commercial creditors better than its bondholders.
"Zambia, Ghana and Malawi are caught in the middle between different creditors," said Chris Humphrey, a senior research associate with ODI, adding that "they're being forced to make a difficult decision."
Malawi and Zambia did not immediately respond to requests for comment. Zambia has also told other media that it would restructure Afreximbank debt.
Lender of last resort
Afreximbank, with a $42 billion balance sheet and shareholders including governments and private investors, is an important lender to the continent, particularly as concessional finance and aid funding shrink.
If Afreximbank's loans are deemed eligible for restructuring, its credit rating could be affected, in turn pushing up its own borrowing costs, its investors said.
Fitch rates the lender 'BBB' and Moody's 'Baa1'.
Afreximbank said in its first-quarter report that for its $27.8 billion loan book, its non-performing loans ratio was 2.44%, without identifying individual clients.
Ghana paid nearly 10% of Afreximbank loan before crisis
Fitch warned last year that an NPL ratio above 6% was among factors that could lead to a negative rating action or downgrade.
While some of its lending is at rates above those that are widely considered concessional terms, some point to Afreximbank's willingness to step in as a lender of last resort at times of strife for countries such as Ghana.
Accra paid as much as 9.55% to the lender for parts of its loan arranged in 2022, shortly before it tumbled into default.
