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Ghana to reach agreement with external bondholders by mid-2024 - Fitch

Fitch.png Fitch Solutions

Fri, 17 Nov 2023 Source:

International research agency, Fitch Solutions, has projected that Ghana will reach an agreement with external bondholders by the middle of 2024.

According to Fitch, agreement with bilateral creditors should not be as difficult and, therefore, may be reached by the end of this year.

Fitch also said the country has made significant progress with fiscal consolidation and other macroeconomic indicators.

A Senior Analyst for Sub-Saharan Africa at Fitch Solutions, Mike Kruiniger, said Ghana’s prospects in reaching an agreement with bilateral creditors since it is not a big creditor.

“Our view is 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.

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

Kruiniger said an agreement with external creditors will further boost investor confidence in the country.

“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 said.

The analyst further said: “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,” Kruiniger alluded.


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