Ghana’s debt crisis is affecting companies beyond its borders.

South Africa’s four biggest banks (four of the continent’s five largest) plan to write off as much as $270 million of their investments in the West African nation’s bonds. That equates to a haircut of almost 60% in some cases.

Standard Chartered has set aside $160 million.

Firms in Nigeria and elsewhere will also have to take losses as the Ghanaian government works to restructure about $30 billion of its public debt. The costs to local lenders will only be known later.

They are just some of the losers from Ghana’s debt meltdown. S&P Global Ratings forecasts haircuts on foreign securities of as much as 50%.

The nation isn’t alone in Africa in facing a debt crunch — Zambia and Ethiopia are also in talks to revamp obligations. But the gold and oil producer’s fall from grace from one of the continent’s top investment destinations came as a shock.

Maybe it shouldn’t have. Yes, COVID-19 and the impact of Russia’s invasion of Ukraine hit the economy hard, but a controversial (and now stalled) plan to build a cathedral in central Accra at an escalating cost of $400 million is a stark example of spending excess.

“The country got itself into the bind, frankly, through poor financial management, and they’ve made political choices that give rise to these fiscal challenges,” says Sim Tshabalala, the chief executive officer of Standard Bank. Africa’s biggest lender by assets estimates a loss from Ghana of $81 million.

President Nana Addo Dankwa Akufo-Addo has defended his government, giving a list of projects in a speech to the nation that his administration has developed.

Investors hadn’t expected that they would be footing part of the bill.

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