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Fitch Ratings has said Ghana\u2019s high level of credit risk following the downgrade to CC reflects the increased likelihood that the country will pursue a debt restructuring as interest costs surge.<\/p>\n
This according to Fith is possible given mounting financing stress, with surging interest costs on domestic debt and a prolonged lack of access to eurobond markets.<\/p>\n
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\u201cThere is a high likelihood that the IMF support programme currently being negotiated will require some form of debt treatment due to the climbing interest costs and structurally low revenue as a percentage of GDP,\u201d Fitch said when it lowered Ghana\u2019s long-term issuer default rating to CC on Friday.<\/p>\n
The most recent IMF debt sustainability analysis, conducted in 2021, found Ghana at a high risk of debt distress and vulnerable to shock to market access and high debt servicing costs.<\/p>\n
Interest costs have risen substantially since then.<\/p>\n
Downgrade to CC<\/strong><\/p>\n Fitch\u00a0<\/b>Ratings has downgraded Ghana\u2019s Long-Term Local- and Foreign-Currency Issuer Default Ratings (IDRs) to \u2018CC\u2019, from \u2018CCC\u2019.<\/p>\n Fitch typically does not assign Outlooks to issuers with a rating of \u2018CCC\u2019 or below.<\/p>\n <\/ins><\/div>\n There is currently tight space for fiscal consolidation in the fragile economy.<\/p>\n <\/ins><\/div>\n Ghana\u2019s economy races against time to tie down a bailout programme as the economy struggles against the backdrop of higher inflation, tighter financial conditions, and weaker growth.<\/p>\n The country\u2019s inflation rate climbed to the highest level in 21 years in August fueled by a slide in the cedi. Consumer prices surged 33.9% in August from 31.7% in July.<\/p>\n Ghana is in dire need of a $3 billion package from the IMF to shore up its economy.<\/p>\n","protected":false},"excerpt":{"rendered":" Fitch Ratings has said Ghana\u2019s high level of credit risk following the downgrade to CC reflects the increased likelihood that the country will pursue a debt restructuring as interest costs surge. This according to Fith is possible given mounting financing stress, with surging interest costs on domestic debt and a prolonged lack of access to […]<\/p>\n","protected":false},"author":2,"featured_media":498,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/nhyirafie.com\/wp-json\/wp\/v2\/posts\/471","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nhyirafie.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nhyirafie.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nhyirafie.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/nhyirafie.com\/wp-json\/wp\/v2\/comments?post=471"}],"version-history":[{"count":1,"href":"https:\/\/nhyirafie.com\/wp-json\/wp\/v2\/posts\/471\/revisions"}],"predecessor-version":[{"id":515,"href":"https:\/\/nhyirafie.com\/wp-json\/wp\/v2\/posts\/471\/revisions\/515"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nhyirafie.com\/wp-json\/wp\/v2\/media\/498"}],"wp:attachment":[{"href":"https:\/\/nhyirafie.com\/wp-json\/wp\/v2\/media?parent=471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nhyirafie.com\/wp-json\/wp\/v2\/categories?post=471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nhyirafie.com\/wp-json\/wp\/v2\/tags?post=471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/p>\n<\/div>\n<\/p>\n<\/div>\n