Fitch upgrades Ghana’s long-term local-currency IDR to CCC

Ratings agency, Fitch, has upgraded Ghana's long-term local currency Issuer Default Rating (IDR) from Restrictive Default (RD) to CCC.

It said this follows the completion of the Domestic Debt Exchange Programme (DDEP).

Fitch stated that Ghana has normalised relations with a significant majority of local currency creditors, with a participation rate of 92% on local-currency government bonds [with similar participation for Cocobills and locally issued foreign-currency bonds] as a result of a series of domestic debt exchanges.

It also declared the country's long-term foreign IDR at Restrictive Default and the country ceiling at B-.

In a report filed by Asaaseradio.com, it said the rating agency "has assigned ‘CCC’ ratings to two interest-only bonds issued on completion of pension funds holdings of the domestic debt exchange."

"Fitch has also assigned ‘CCC’ ratings to four domestic US dollar-denominated bonds issued on 4 September 2023," it added.

Sizeable debt service reduction

Fitch said the local-currency debt exchanges represent a debt service reduction of ¢52 billion in 2023.

According to the International Monetary Fund, the debt service represented 117% of revenue in 2022.

“Of this total debt service reduction, we estimate the interest payment reduction in 2023 amounts to 1.8% of Gross Domestic Product (GDP) or 12% of revenue and grants,” Fitch added.

SA/NOQ

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