International rating agency, Fitch, has downgraded Ghana’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to ‘CCC’ from ‘B-‘.
In a report sighted by GhanaWeb, it noted that the downgrade reflects the deterioration of Ghana’s public finances which has contributed to a prolonged lack of access to Eurobond markets.
This, Fitch said has led to a significant decline in external liquidity.
The rating agency furthered that, “in the absence of new external financing sources, international reserves will fall close to two months of current external payments (debits in the current account) by end of 2022.”
“Fitch estimates that Ghana faces USD2.75 billion of external debt servicing in 2022, including amortisation and interest, and USD2.8 billion in 2023. Access to external financing will remain tight, as Ghana is likely to remain locked out of Eurobond markets, which had come to be a regular source of external financing for the government,” Fitch added.
Meanwhile, Government of Ghana has run to the International Monetary Fund (IMF) for financial bailout.
A team from the IMF, led by Carlo Sdralevich arrived in the country on July 5 to engage government officials for a possible bailout.
The IMF programme is aimed at restoring macroeconomic stability and safeguarding debt sustainability among many others.