Fitch, a ratings agency, anticipates that Ghana will finalize its external debt restructuring by June 2024.
The UK-based firm’s latest assessment of Ghana indicates that, barring unforeseen circumstances, the country will complete its external debt restructuring program with Eurobond holders by the specified date.
Ghana has already reached an agreement with its bilateral creditors in January and is on track to finalize the terms of restructuring with commercial creditors by the second half of 2024.
Fitch also noted that the restructuring terms with Ghana’s official creditors are unlikely to have a significant impact on the banking sector.
It highlighted that banks have minimal exposure to Eurobonds and likely have already accounted for impairments related to these bonds.
“Fitch expects Ghana to conclude its external debt restructuring in 1H24. Ghana recently agreed restructuring terms with official creditors but we do not expect this to significantly affect the banking sector. Banks have limited exposure to Eurobonds and are likely to have taken impairments for these already”.
Fitch also noted that while the loan quality of banks remains at risk due to the macroeconomic fallout from the sovereign default, the impact on the banking sector is mitigated by the relatively small size of the loans involved.
However, the agency emphasized that the capitalization of banks is highly sensitive to Ghana’s local-currency creditworthiness, as their exposure to local-currency government bonds is significant relative to their capital.