Ghana's Long-Term Local-Currency IDR affirmed at 'Restricted Default' – Fitch Ratings

Ghana’s Long-Term Foreign-Currency (LTFC) and Long-Term Local-Currency (LTLC) Issuer Default Ratings (IDR) have been affirmed at Restricted Default (RD) by Fitch Ratings.

The development comes after Ghana’s LTFC and Issuer Default Ratings were downgraded from ‘RD’ to ‘C’ over government's failure to honor Eurobond coupon payments back in February 2023.

The latest verdict by the ratings firm, however, noted that Ghana has made considerable progress with its official creditors to undertake an external debt restructuring exercise.

Ghana aims to restructure about $20 billion of its external debt which includes Eurobonds, bilateral debt, export credit agencies-backed commercial loans and non-insured commercial loans.

Fitch said it expects Ghana and the Official Creditor Committee (OCC) to reach an agreement on the debt swap by the end of 2023 while restructuring for private creditors could be reached in the second quarter of 2024.

Before securing an IMF loan facility for $3 billion, the OCC granted financing assurances to the government of Ghana.

Ghana has since commenced a second round of debt restructuring targeting cocoa bills, US Dollar denominated domestic bonds and pension funds. The country plans to also restructure the debt of Eurobond holders with an agreement expected to be reached by the end of 2023.

MA/NOQ