Ghana is locked in a deepening dispute with the African Export-Import Bank (Afreximbank) over a $768.4mn liability, as the West African country navigates the aftermath of a sovereign debt default and sweeping restructuring. 

The country's Finance Ministry insists Afreximbank must accept losses in line with other creditors – including bilateral lenders like China and private holders of over $13bn in eurobonds – under the principle of “comparable treatment.”

“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,” Finance Minister Cassiel Ato Forson said in a Bloomberg report. “The Afrexim debt is part of our restructurable envelope.”

However, Afreximbank – founded by African governments and private investors over three decades ago – argues it enjoys immunity from such losses under its establishment treaty, similar to the World Bank and International Monetary Fund, despite charging higher interest rates.

“We are not part of the restructuring programme,” Chandi Mwenebungu, the bank’s managing director and group treasurer, told investors on a call. “We have no intention of breaking our own establishment agreement.”

The standoff has major implications for other African nations undergoing or considering restructurings, such as Zambia, which has also borrowed heavily from African multilateral banks. While Zambia’s finance ministry did not respond to requests for comment, analysts say the outcome of the Ghana-Afreximbank impasse could set a precedent.

Thomas Moatti, a director at Lazard Inc., which advises Ghana on its debt overhaul, described the situation as a “complete grey zone” in global debt architecture.

“For the moment, no one really has brought that to the international policy agenda and has been ready to de facto impose losses on those institutions,” Moatti said during a webinar in March. “So clearly also a topic to be addressed in the future.”

The dispute also shines a spotlight on the limitations of the G20’s Common Framework – a post-COVID initiative meant to streamline sovereign debt workouts for low-income countries. Both Ghana and Zambia have tried to navigate their restructurings using the framework, but implementation has proved patchy and slow.

Unlike Western-backed multilateral lenders, African development banks often operate with higher borrowing costs and pass those on to countries they finance, said Samaila Zubairu, chair of the Alliance of African Multilateral Financial Institutions.

“Imposing losses on them would ultimately increase the cost of development financing for the continent,” said Zubairu, who also heads the Africa Finance Corporation.

Afreximbank has signalled its willingness to go to court to enforce debt repayment. Earlier this month, it won a judgment against South Sudan, which was ordered to pay $657mn in defaulted debt, with a 13.5% interest rate accruing until full payment.

On the investor call, Mwenebungu said the legal move was necessary to uphold Afreximbank’s preferred creditor status.

The bank, based in Cairo, stressed in an emailed response that its debt terms are governed by its founding treaty, “not by classifications created outside its own framework.”