Fitch projects Ghana’s exit from sovereign default by mid-2025

Ratings agency Fitch has projected that Ghana will exit sovereign default by July 2025, following the anticipated completion of its external debt restructuring by the end of June 2025.

In its latest webinar focusing on debt restructuring in Ghana, Zambia, and Ethiopia, Fitch expressed optimism that Ghana would finalize the treatment of its non-bond debt by the end of 2024.

Thomas Garreau, Associate Director for Europe, Middle East, and Africa Sovereign Ratings at Fitch, explained:
“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.”

Milestones in Ghana’s Debt Restructuring

Ghana has made significant progress in addressing its external debt obligations. In January 2024, the country reached an agreement with the Official Creditor Committee (OCC) on the parameters for official debt treatment. This was followed by a Eurobond exchange in October 2024, during which approximately $14.2 billion worth of Eurobonds, including Principal Deficit Instruments (PDIs), were restructured.

The restructuring process resulted in a haircut equivalent to 6.2% of Ghana’s Gross Domestic Product (GDP). Moreover, interest payments have been reduced significantly:

• A decrease of 8% of Fitch’s projected revenue in 2024
• A decrease of 5% in 2025
• A decrease of 4% in 2026

Challenges and Outlook

Despite the progress, Fitch noted potential delays in finalizing the restructuring process due to Ghana’s upcoming elections. However, the agency remains confident that the country’s adherence to the common framework will ensure the completion of debt treatment within the projected timeline.

The successful conclusion of the restructuring process will mark a major milestone in Ghana’s efforts to stabilize its economy, reduce fiscal pressures, and restore access to international capital markets.

Significance of the DDEP

By addressing its external debt challenges, Ghana is positioning itself to achieve sustainable economic recovery and improve investor confidence. The reduction in interest payments and overall debt burden will create fiscal space for developmental priorities and support the country’s long-term growth ambitions. Fitch’s projection underscores Ghana’s progress in managing its debt crisis and offers hope for a brighter economic future as it moves toward resolving its sovereign default status