Rating agency, Fitch, has indicated that Ghana’s public debt would decline to 87% of Gross Domestic Product at the end of 2023, from 89% in 2022.

This will be driven by the 50% haircut on Bank of Ghana's holdings of nonmarketable debt, which represents a debt reduction of 4.2% of the estimated 2023 Gross Domestic Product.

Fitch expects this will be partly offset by 33% year-on-year cedi depreciation compared with the end-2022 and the primary deficit.

“Assuming a 30% haircut on external debt considered for the restructuring, year-on-year cedi depreciation of 20% in 2024 and 9% in 2025 and a GDP deflator of 21% and 10% respectively, public debt would fall to 78% by 2025, although there is a high degree of uncertainty surrounding the definitive external debt restructuring parameters”, it added.

Fitch had earlier stated that Ghana's gross public debt for 2023 was estimated at 99% of GDP.

As part of the IMF programme, Ghana has committed to undertake a primary fiscal adjustment (commitment basis) of 5.1 percentage points of GDP by 2026 compared with 2022.

Fitch estimates the primary fiscal adjustment to reach 3.1 percentage points in 2023, bringing the primary deficit to 0.6% of GDP from 3.7% in 2022, driven by reductions of capital expenditure, the wage bill and other current expenditure, including transfers to the energy and financial sectors.

“We project the primary fiscal balance to improve further by about 2 percentage points by 2025, equally split between increased revenue collection and expenditure rationalisation, thus reaching a 1.2% of GDP surplus in 2025.