Fitch Ratings has cautioned that despite Ghana’s efforts to restructure a significant portion of its debt, the country will continue to grapple with severe liquidity challenges in 2025 and 2026.
The UK-based ratings agency highlighted that Ghana’s interest rate-to-revenue ratio will remain one of the highest among sovereigns rated by Fitch, posing a significant fiscal challenge. The ratio is projected to hit 29% in 2025 and rise slightly to 30% in 2026, nearly double the 16% average for emerging markets.
Thomas Garreau, Associate Director of Sovereign Ratings for Europe, the Middle East, and Africa at Fitch, underscored the need for decisive measures to stabilize Ghana’s fiscal economy.
“We believe Ghana will continue to face substantial liquidity pressures. The interest rate-to-revenue ratio will remain extremely high, at about 30%, which is almost twice the average for emerging markets,” Garreau stated. He acknowledged the country’s ongoing fiscal consolidation efforts, which have resulted in a 4.6 percentage-point adjustment in the primary fiscal balance between 2022 and 2024, but stressed that more work is needed.
Fitch also reiterated its timeline for improving Ghana’s credit status, projecting that the country could exit sovereign default by July 2025. This prediction hinges on the successful completion of external debt restructuring by the end of June 2025.
Ghana’s fiscal and economic reforms, while substantial, will need to address these persistent liquidity pressures to achieve sustainable economic recovery.
SOURCE: JoyBusiness
Join our WhatsApp channel: https://whatsapp.com/channel/0029VakDz4u9RZATWh53yC1a
