Leveraging my experience in sovereign lending at GCB Bank, including Ghana’s DDEP context, I explain these risks under international law and BoG guidelines.

(a) Calvo Doctrine:

• Originating from Argentine jurist Carlos Calvo, it asserts that foreign investors/lenders must submit to local jurisdiction and laws without diplomatic intervention or international arbitration, treating them equally to nationals. In lending, it risks forcing disputes into potentially biased local courts, limiting recourse.

(b) Other Risks in Lending to a Foreign State:

• Sovereign Immunity: States immune from suits/enforcement under acts like UK’s State Immunity Act 1978; waivers needed in agreements.
• Political Risk: Changes in government, expropriation, or war disrupting repayment; e.g., state succession doctrines.
• Exchange Controls: Restrictions on currency convertibility, as per Bretton Woods; clauses protect but enforcement varies.
• Withholding Tax: Deductions on interest; mitigated by treaties but avoidance schemes risky.
• Act of State Doctrine: Courts won’t question foreign acts, blocking remedies.
• Enforcement Challenges: Foreign judgments hard to enforce without reciprocity.
• Practically, in Ghana’s international borrowings, these are hedged via syndication, insurance (e.g., ECGD), and legal opinions for BoG compliance.