Adnan Adams Mohammed
All things being equal, Ghana is expected to exit from sovereign default by July 2025, Fitch Ratings has projected.
The projection is based on expectations of the Ghana finalizing its external debt restructuring by the end of June 2025.
Also, the international rating agency is optimistic that Ghana will complete the non-bond debt restructuring by the close of this year as disclosed during a recent webinar on debt restructuring in Ghana, Zambia, and Ethiopia.
“For Ghana, we also expect the completion of the common framework restructuring by the first half of next year”, Thomas Garreau, Associate Director of Europe, Middle East, and Africa Sovereign Ratings at Fitch projected. “There are some elections, and that would delay the completion of the process, hence our forecast of next year.”
Ghana reached an agreement with the Official Creditor Committee (OCC) on the parameters for official debt treatment in January 2024, followed by the completion of a Eurobond exchange in October 2024.
The restructuring process has so far covered approximately US$14.2 billion in Eurobonds, including Principal Debt Instruments (PDIs), with the associated haircut amounting to 6.2% of the country’s Gross Domestic Product (GDP).
The restructuring has already begun easing Ghana’s fiscal pressures. Fitch estimates that interest payments have been reduced by 8% of projected revenue for 2024, 5% in 2025, and 4% in 2026, offering some relief to government finances.
Fitch’s forecast aligns with Ghana’s ongoing efforts to stabilize its economy, even as the country navigates the complexities of election-year dynamics in 2024.
