Ghana to Exit Sovereign Default Mid-2025 – Fitch Ratings Says
Fitch Ratings has projected Ghana’s exit from sovereign default by July 2025, based on expectations of the country finalizing its external debt restructuring by the end of June 2025.
The UK-based rating agency expressed optimism that Ghana will complete the non-bond debt restructuring by the close of this year, as disclosed during a recent webinar on debt restructuring in Ghana, Zambia, and Ethiopia.
Thomas Garreau, Associate Director of Europe, Middle East, and Africa Sovereign Ratings at Fitch, remarked, “For Ghana, we also expect the completion of the common framework restructuring by the first half of next year. There are some elections, and that would delay the completion of the process, hence our forecast of next year.”
Progress in Debt Restructuring
Ghana reached an agreement with the Official Creditor Committee (OCC) on the parameters for official debt treatment in January 2024, followed by the completion of a Eurobond exchange in October 2024.
The restructuring process has so far covered approximately $14.2 billion in Eurobonds, including Principal Debt Instruments (PDIs), with the associated haircut amounting to 6.2% of the country’s Gross Domestic Product (GDP).
Fiscal Impact
The restructuring has already begun easing Ghana’s fiscal pressures. Fitch estimates that interest payments have been reduced by 8% of projected revenue for 2024, 5% in 2025, and 4% in 2026, offering some relief to government finances.
Fitch’s forecast aligns with Ghana’s ongoing efforts to stabilize its economy, even as the country navigates the complexities of election-year dynamics in 2024.
