Audio By Carbonatix
Ratings agency, Fitch, expects Ghana’s oil trade position to be close to net neutral in the near term.
The UK-based firm said the Ghanaian banking sector will therefore not receive a foreign currency liquidity boost from higher energy prices.
However, it pointed out that the sector’s foreign currency liquidity is generally adequate, with Ghana’s international reserves strengthening significantly in 2025 on higher gold export earnings. This provides a buffer against an energy price shock.
In its article titled “African Banks Could Be Affected in Prolonged Iran War Scenario”, Fitch said African banks’ ratings are often closely linked with those of their respective sovereigns.
“This is mainly due to the banks’ large holdings of government fixed-income securities denominated in local currencies, which usually account for a high share of their assets and measure at a high percentage of total equity”, it explained.
It added that higher external debt servicing costs and reduced market access could cause governments to rely more on domestic financing, strengthening this sovereign-bank nexus.
It believes there is some threat to African sovereign ratings under the adverse scenario.
However, any effects on sovereign ratings – including potential positive effects for hydrocarbon exporters – would depend on multiple factors.
These include the durability of related changes in macroeconomic prospects, and external and fiscal positions, as well as policy responses.
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