Ghana’s Anticipated Debt Restructuring with Global Creditors in 2024

Ghana is poised to engage in discussions with both bilateral and commercial creditors in the early and mid-2024, aiming for a comprehensive restructuring of its external debt, according to projections by UK-based firm Fitch Solutions. The firm anticipates a resolution with bilateral creditors by early 2024 and foresees a corresponding agreement with commercial creditors by mid-2024.

Fitch Solutions believes that such agreements would have a positive impact on investor sentiment towards Ghanaian assets, fostering increased capital inflows and providing essential support to the country’s currency, the cedi. The December 2023 Country Risk Report on Ghana by Fitch Solutions emphasizes the government’s expected progress in restructuring external debt under the G20 Common Framework in the upcoming quarters.

The report states, “Our current projections are predicated on the assumption that the Ghanaian authorities and external creditors will be able to finalize debt restructuring negotiations by mid-2024.” Fitch Solutions underscores the potential consequences of a lengthier negotiation process, warning that a delayed resolution may weaken investor confidence in Ghanaian assets, triggering a renewed sell-off of the cedi. Such a scenario could result in increased imported price pressures and a sustained weakness in domestic demand, deviating from baseline forecasts.;

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