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”.
Relatedly, the Ministry of Finance has revealed that it has successfully swapped GH₵82,994,510,128 worth of old bonds from a possible GH₵ 97,749,624,691 under the domestic debt exchange programme.
The amount represents an 84.91% success rate exceeding the Finance Ministry’s intended target of an 80 percent participation rate.
Meanwhile, the government has extended the settlement date for bonds under the domestic debt exchange programme by one more week after achieving about 85 percent participation rate.
The old settlement date of February 14 has now been pushed further to February 21, 2023.