Ghana’s debt is expected to decline to 70% of Gross Domestic Product (GDP) in 2024 from 77% of GDP in 223.

It is also expected to narrow to 68% in 2025 and 2026 respectively.

According to ratings agency Fitch, a strong medium-term growth forecast and ongoing fiscal consolidation are behind this decline.

It predicted that Ghana will complete its external debt restructuring by early 2025

“The affirmation of LTFC IDR at 'Restrictive Default’ reflects Ghana remaining in default on some of its external commercial debt, pending a restructuring. The Eurobond exchange covenants contain a most-favoured creditor clause that restricts the country from restructuring debt with its remaining creditors on more favourable terms (on a present value basis) without offering consideration of equivalent value to noteholders. We estimate Ghana will complete its external debt restructuring by early 2025”.

Fitch assigned Ghana's new US dollar bonds, issued on October 9, 2024, a 'CCC+' rating.

It also upgraded Ghana's Long-Term Local-Currency (LTLC) Issuer Default Rating (IDR) to 'CCC+' from 'CCC'.

It explained that the upgrade of Ghana's LTLC IDR to 'CCC+' reflects the increased confidence that the likelihood of another default on Ghana's LC debt is being reduced with the completion of the Eurobond restructuring, as this further unlocks access to concessional international finance.

On 4 October 2024, Ghana and the IMF reached a staff-level agreement on the third review of the extended credit facility, unlocking US$360 million once approved by the International Monetary Fund board.

Primary surplus to hit 0.3% of GDP

Fitch also estimated that the 2024 primary surplus, on a commitment basis, will reach 0.3% of GDP, representing a 4.6 percentage points adjustment compared with 2022, mainly driven by a 4.1 percentage points reduction in primary expenditure.

“Despite a record of fiscal slippage in election years, we consider the risk to be low in the lead-up to the elections due in December 2024, given the strong commitment of the authorities to the IMF programme and the 1H24 [Half-year 2024] fiscal data on the track to meet Ghana's commitments. However, there is greater uncertainty over the degree of commitment of a new administration”.

It projected that Ghana's primary surplus would reach 0.9% of GDP in 2026 on a commitment basis.