China and the West take a step to ease Africa’s debt crisis

GHANA MADEIMF history when it led the wave of sub-Saharan African countries that won independence more than six decades ago. It may now be making history again, as the first test case for a new approach to debt relief. China and Western governments may have overcome one barrier to restructuring the billions of dollars owed by countries with unsustainable debts.On May 17th the ’s board signed off on a $3bn bail-out for Ghana and immediately released an urgently needed first tranche of $600m. This was made possible only by assurances from Ghana’s bilateral creditors—in , but also the Paris Club, an informal group of mainly rich Western countries—that they would take losses on their loans to Ghana. This is a welcome first step. But assurances need to become reality if countries in debt distress are to get the write-downs they need. And many other African countries require more help from everyone. The danger is that the will force African governments to cut back on essential investments in education and health, undermining the progress of recent years.