Fitch Solutions has indicated that foreign investors continue to approach Ghana’s debt restructuring process with uncertainty.
The UK-based firm has highlighted concerns over the rapid depreciation of the Ghanaian cedi throughout 2022, combined with the ongoing uncertainty surrounding Ghana’s external debt restructuring process under the G20 Common Framework. These factors are expected to contribute to foreign investors remaining cautious.
In their recent evaluation of Ghana, titled “Bleak Investment Outlook Dims Ghana’s Short-Term Growth Prospects,” Fitch Solutions emphasized that sentiment towards the Ghanaian market remains weak.
“Indeed, yields on the country’s Eurobonds traded at an elevated 34.4% (as of July 6), indicating that sentiment towards the Ghanaian market remains weak”.
“Moreover, we project that growth in Ghana’s most salient source markets – including the EU, UK and US – will soften over 2023”, it explained.
Fitch Solutions has explained that the cautious approach towards overseas expansions in emerging markets is due to restrictive monetary conditions and persistently high inflation levels. These factors are expected to dampen the appetite for foreign direct investment (FDI) in such markets, including Ghana.
As a result of these dynamics, Fitch Solutions predicts that FDI inflows into Ghana will not reach pre-pandemic levels in 2023. This situation further clouds the short-term outlook for fixed investment in the country.