Fitch expects Ghana to conclude external debt restructuring by June 2024

On February 28, 2024, 7:40 PM

Ratings agency, Fitch, expects Ghana to conclude its external debt restructuring by June 2024.

In its latest assessment of Ghana, the UK-based firm said all things being equal, Ghana would conclude its external debt restructuring programme with the Eurobond holders by June 2024.

The nation reached an agreement with its bilateral creditors in January and is expected to agree on terms of restructuring with the commercial creditors by the end of the second half of 2024.

Fitch said the debt restructuring terms with Ghana’s official creditors would not significantly affect the banking sector.

It also pointed out that banks have limited exposure to Eurobonds and are likely to have taken impairments for these already.

“Fitch expects Ghana to conclude its external debt restructuring in 1H24. Ghana recently agreed restructuring terms with official creditors but we do not expect this to significantly affect the banking sector. Banks have limited exposure to Eurobonds and are likely to have taken impairments for these already”.

Again, it mentioned that the loan quality of banks is still at risk from the macroeconomic fallout due to the sovereign default, but the risk to the banking sector is limited by the small size of the loan.

However, it stressed that capitalisation is highly sensitive to Ghana’s local-currency creditworthiness as exposure to local-currency government bonds is high relative to capital.