Fitch Downgrades Ghana’s Creditworthiness to Deeper Junk Status; Assigns ‘Restricted Default’ to Government Bonds

International ratings agency, Fitch Ratings, has downgraded Ghana’s creditworthiness to further junk status.

In its latest report on Ghana, it said “Fitch Ratings downgraded Ghana’s Long-Term Local Currency (LC) Issuer Default Rating (IDR) to Restricted Default (RD) from ‘C’.”

It attributed the downgrade to the decision by government to embark on the debt exchange programme and the recent default on local bonds that matured on February 6, 2023 and another one which is due for payment this week.

“The downgrade of Ghana’s local-currency denominated debt follows the completion of a domestic debt exchange offer by the Republic of Ghana. This transaction is an element of the recovery programme for which the government is seeking the support of the International Monetary Fund for a 3-year Extended Credit Facility (ECF) of about $3 billion”.

Fitch also affirmed Ghana’s Long-Term Foreign Currency (FC) IDR at ‘C’, saying, “Fitch typically does not assign Rating Outlooks to sovereigns with a rating of ‘CCC+’ or below”.