Fitch downgrades Ghana's local-currency credit score to 'restrictive default'

International Ratings agency, Fitch, has downgraded Ghana's local-currency credit score to 'restrictive default'.

The latest verdict comes on the back of the conclusion of the Domestic Debt Exchange Programme with Fitch Ratings describing the exercise as a distressed one.

Fitch further cited the “material reduction in terms vis-à-vis the original contractual terms and the fact that the exchange is needed to avoid a traditional payment default” as part of its reasons for the recent downgrade.

The agency in its latest statement on Ghana also placed the country's long-term foreign currency IDR at 'C', which is the lowest score before default.

This verdict is due to Ghana defaulting on its local bonds and Eurobond coupon payments in January this year while Fitch has also cut the foreign-currency grade to ‘RD’ on the back of the grace period expiring on February 17, 2023.

Meanwhile, the government of Ghana on February 13, disclosed that over 80 percent of local bondholders signed unto the Domestic Debt Exchange Programme (DDEP).

The programme forms part of the requirement ahead of Ghana securing a Board-Level Agreement from the International Monetary Fund (IMF) for an amount of $3 billion financial bailout.

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