Finance ministry says Accra will not service debts including its Eurobonds, commercial loans and most bilateral loans.

Ghana has suspended payments on most of its external debt, effectively defaulting as the country struggles to plug its cavernous balance of payments deficit.

Its finance ministry said on Monday that it will not service debts including its Eurobonds, commercial loans and most bilateral loans, calling the decision an “interim emergency measure”

The government “stands ready to engage in discussions with all of its external creditors to make Ghana’s debt sustainable”, the finance ministry said.

The suspension of debt payments reflects the perilous state of the economy, which had led the government last week to reach a $3bn staff-level agreement with the International Monetary Fund (IMF).

Ghana had already announced a domestic debt exchange programme and said that an external restructuring was being negotiated with creditors.

The country has been struggling to refinance its debt since the start of the year after downgrades by multiple credit ratings agencies on concerns it would not be able to issue new Eurobonds.