Ratings agency Fitch on Wednesday upgraded Ghana's long-term local-currency issuer default rating to 'CCC' from 'restricted default', after the country started settling payments on outstanding local bonds following a domestic debt restructuring.
Ghana defaulted on most of its $29 billion external debt last year, as interest payments and inflation soared, and it still needs to negotiate a resolution with its private international bondholders and bilateral creditors.its domestic debt, which will lower its interest payments by 10% of the government's expected revenues or 1.6% of GDP in 2023, and 6% of revenues or 0.9% of GDP in 2024, Fitch said.
Despite this immediate relief, the restructuring has increased Ghana's debt-to-GDP ratio by 0.6 percentage points and the ratio is still above 100% after the process, it said. Around 65% of eligible holders of Ghana's 126.97 billion cedis local bonds registered for its domestic bond exchange programme under its restructuring.
Fitch said it did not expect Ghana to get "financing assurances" - commitments from its external bilateral creditors to restructure the country's debts - before the end of June. These assurances are necessary for Ghana to secure access to a $3 billion International Monetary Fund loan.
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