Ratings agency, Fitch, has upgraded Ghana's Long-Term Local Currency Issuer Default Rating (IDR) to 'CCC' from 'RD'.
The UK-based firm has also affirmed Ghana's Long-Term Foreign-Currency IDR at 'RD' and the Country Ceiling at 'B-'.
Fitch assigned 'CCC' ratings to two interest-only bonds issued on completion of pension funds holdings of the Domestic Debt Exchange.
It again assigned 'CCC' ratings to four domestic US dollar-denominated bonds issued on September 4, 2023.2023.
The upgrade of Ghana's Long-Term Local-Currency IDR, it said, follows the completion of the Domestic Debt Exchange Programme.
“Fitch considers that as a result of a series of domestic debt exchanges, Ghana has normalised relations with a significant majority of local currency creditors, with a participation rate of 92% on local-currency government bonds (with similarly participation for Cocoa bills and locally issued foreign-currency bonds). Some non-participating bondholders are domestic individual bondholders, for which the authorities have publicly stated being current on the payments following a memorandum of understanding signed in May 2023”, it said.
Sizeable debt service reduction
Fitch said the local-currency debt exchanges represent a debt service reduction of ¢52 billion in 2023 (6% of estimated 2023 GDP or 39% of estimated 2023 revenue and grants).
According to the International Monetary Fund, the debt service represented 117% of revenue in 2022.
“Of this total debt service reduction, we estimate the interest payment reduction in 2023 amounts to 1.8% of Gross Domestic Product (GDP) or 12% of revenue and grants”, Fitch added.
Fitch continued that the domestic US dollar-denominated debt exchange adds another ¢5.0 billion (0.6% of GDP, 4% of revenue and grants) debt service reduction in 2023, and a further reduction is coming from the 50% principal haircut agreed with the Bank of Ghana on its holdings of ¢71 billion local-currency nonmarketable debt.
Latest Stories
-
Paris 2024: Opening ceremony showcases grandiose celebration of French culture and diversity
58 mins -
How decline of Indian vultures led to 500,000 human deaths
2 hours -
Paris 2024: Ghana rocks ‘fabulous fugu’ at olympics opening ceremony
2 hours -
Trust Hospital faces financial strain with rising debt levels – Auditor-General’s report
3 hours -
Electrochem lease: Allocate portions of land to Songor people – Resident demand
3 hours -
82 widows receive financial aid from Chayil Foundation
3 hours -
The silent struggles: Female journalists grapple with Ghana’s high cost of living
3 hours -
BoG yet to make any payment to Service Ghana Auto Group
3 hours -
‘Crushed Young’: The Multimedia Group, JL Properties surprise accident victim’s family with fully-furnished apartment
4 hours -
Asante Kotoko needs structure that would outlive any administration – Opoku Nti
4 hours -
JoyNews exposé on Customs officials demanding bribes airs on July 29
5 hours -
JoyNews Impact Maker Awardee ships first consignment of honey from Kwahu Afram Plains
6 hours -
Joint committee under fire over report on salt mining lease granted Electrochem
6 hours -
Life Lounge with Edem Knight-Tay: Don’t be beaten the third time
6 hours -
Pro-NPP group launched to help ‘Break the 8’
6 hours