There’s a 50% chance Ghana will default on its debt repayment – Fitch

There is a 50% chance that Ghana could default on its debt repayment, rating agency, Fitch, has projected.

The agency said that Ghana’s sovereign credit rating may yet face another downgrade closer to default.

According to a report by myjoyonline.com, Fitch said that this could become an even more definite thing should Ghana’s talks with the International Monetary Fund (IMF) for a $3 billion package bring about a restructuring of the country’s debts.

It will be recalled that in September 2022, Fitch downgraded Ghana’s Long-Term Local and Foreign-Currency Issuer Default Ratings (IDRs) to CC.

Following the economic challenges faced by the country, Ghana began its formal negotiations for the extended credit facility programme with the IMF in September 2022.

It has been the hope of the government that this move would bring some stability in the economy, amid the rapid depreciation of the Ghana cedi and soaring inflation rates.

This was after cutting its 2022 discretionary expenditure by as much as 30%. However, this did not deter investors from dumping Ghana’s Eurobonds.

According to Bloomberg, Ghana was considering restructuring part of its 190.3 billion ($13.6 billion) of local debt, as part of the talks with the International Monetary Fund.

A committee was formed in October 2023 to solicit views from bondholders for a debt management strategy.