Fitch projects progress for Ghana's External Debt Exchange before end of 2023

A UK-based firm, Fitch Solutions has projected the country’s possible good standing with its external creditors before the end of 2023.

According the firm, the country has advanced in the areas of its economic indicators and fiscal consolidation.

A myjoyonline.com report further indicates Ghana is likely to reach an agreement with its external bondholders in the middle of next year.

Senior Analyst for Sub-Saharan Africa at Fitch Solutions, Mike Kruiniger, also alludes to this by disclosing Ghana is not a big creditor like Zambia, hence, will be appealing to creditors.

“Our view as Ghana will make progress regarding the restructuring....very quickly with some positive development expected before the end of 2023. Bilateral debt as a share of total external debt in Ghana is very low and Ghana is not a bigger creditor like Zambia," he explained.

“So, the dynamics should speed up negotiations process with the official creditors", He added.

The Fitch analyst furthered that investor sentiment about the country is on the verge of going up after progress with its bilateral creditors regarding the debt restructuring.

“Positive signaling regarding a debt restructuring due between Ghana and its bilateral creditors should then improve investors’ sentiment, increase demand for the cedi and allow the exchange rate to plow back some of its losses,” he added.

On the back of the speed of the country’s negotiation with its external bondholders, Mike Kruiniger explained that will be long coming because of the major share they wield in the external debt.

“I think it is the negotiations of Ghana's bondholders that are going to take longer given that the commercial debt constitutes more than 60% of total external debt and most of this is in the form of Eurobonds.

“So, our view is that Ghana will be able to reach a deal with the external bondholders most likely by mid-2024”, Mr. Kruiniger shared.

BAJ/MA

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