Skip to main content

Ghana to face persistent liquidity pressures in 2025, 2026 – Fitch warns

 


Fitch Ratings Agency has predicted that Ghana will face significant liquidity pressures going into 2025 and 2026, despite restructuring most of its debt.

The UK-based credit rating agency highlighted that Ghana’s interest-to-revenue ratio will remain among the highest in its rated sovereign portfolio. Estimates indicate the ratio will reach 29% in 2025 and 30% in 2026, nearly double the average of 16% for emerging markets.

Calling for Drastic Fiscal Measures, Thomas Garreau, Associate Director for Europe, Middle East, and Africa Sovereign Ratings at Fitch, stressed the need for aggressive fiscal reforms to address Ghana’s economic challenges.

We still anticipate significant liquidity pressures for Ghana,” Garreau stated. “The country’s interest-to-revenue ratio remains exceptionally high at approximately 30%, which is nearly double the emerging market average. This underscores the need for drastic measures to stabilize the fiscal economy.”

Despite these challenges, Garreau acknowledged Ghana’s efforts at fiscal consolidation, citing a 4.6 percentage point primary fiscal adjustment achieved between 2022 and 2024.
Outlook on Sovereign Default

Fitch previously indicated plans to lift Ghana out of sovereign default by July 2025. However, the ongoing liquidity pressures and high interest burdens could complicate the country’s path to financial stability.

Labels:

Comments

Post a Comment

Popular posts from this blog

Fitch Solutions retains 2025 growth rate projection at 4.2%

 Fitch Solutions has reaffirmed its projection that Ghana’s economy will expand by 4.2% in 2025. This estimate slightly exceeds the International Monetary Fund’s forecast of 4% and the World Bank’s projection of 3.9%. The UK-based research firm attributes its outlook to historically high gold prices, which are expected to cushion the Ghanaian economy against a global slowdown triggered by rising tariffs. Higher gold prices are anticipated to strengthen government revenue, enhance foreign exchange earnings, and help sustain currency stability. The report also highlights that Ghana is relatively less vulnerable to increasing trade restrictions from the United States, given that its primary exports—gold and crude oil—are not directly affected by the tariffs introduced by President Trump’s administration. Moreover, the US constitutes only about 4% to 5% of Ghana’s total exports. In contrast, Ghana’s trade relations are more heavily oriented toward China and European countries, particul...
Post a Comment
Read more

BoG injects $20m into FX market to support 11 BDCs

  The Bank of Ghana (BoG) has injected $20 million into the foreign exchange market in the latest round of its forward FX auction targeted at Bulk Oil Distribution Companies (BDCs). The intervention, which benefited eleven BDCs, is part of the central bank’s broader strategy to stabilise the cedi and ensure price stability in the petroleum downstream sector. Held on Tuesday, April 29, the auction was priced at a locked exchange rate of GHS 14.28 to the US dollar, with bid offers ranging from GHS 13.85 to GHS 15.55. This move reflects the BoG’s continued effort to deepen forex liquidity and safeguard the domestic fuel supply chain against volatility in global energy markets. By directly supplying FX to BDCs, the central bank seeks to ease pressure on the interbank market, guarantee the uninterrupted flow of petroleum products, and mitigate the pass-through effects of exchange rate fluctuations on fuel prices. The $20 million disbursement forms part of a $120 million programme for th...
Post a Comment
Read more

Kenpong Travel & Tours Champions Breast Cancer Awareness During Customer Week

  As part of activities to mark Customer Week, Kenpong Travel & Tours, a leading travel agency in Ghana, is joining the global fight against breast cancer. October is Breast Cancer Awareness Month, and the company is passionate about spreading hope and support to those affected. At Kenpong Travel & Tours, we believe that travel and exploration can be therapeutic and empowering. That's why we're committed to supporting our customers and the broader community in the fight against breast cancer. We're proud to stand in solidarity with breast cancer warriors and survivors. At Kenpong Travel & Tours, we believe that everyone deserves a chance to explore the world and create unforgettable memories. Let's prioritize health, support one another, and fight against breast cancer," said Kennedy Agyapong, CEO of Kenpong Travel & Tours. Our efforts are focused on raising awareness, promoting early detection, and supporting those affected by breast cancer. We urg...
Post a Comment
Read more