Fitch, a renowned rating agency, has stated that Ghana has a significant task ahead in restructuring its debt, which currently exceeds 400 billion.

The UK-based firm also suggested the possibility of a second round of the Domestic Debt Exchange Programme (DDEP).

Ghana aims to secure debt relief of approximately $10.5 billion from its external creditors over the next four years.

During discussions on credit stories concerning African Sovereigns and Banks, Toby Iles, Senior Director in charge of Emerging Market Economies at Fitch, expressed that talks on external debt restructuring have been prolonged.

“We haven't had the official creditor committee meeting, so we still quite have a long way to go. Maybe the historic track record on the common framework is moving slowly… that is not great, maybe Ghana can be a bit different.”

He added, “And there's still quite a lot of work to do. And especially as mentioned, there may still be a lot happening on the domestic debt front.”

Mr Iles further clarified that the domestic debt exchange did not encompass all domestic bonds.

“The domestic debt exchange in some way has been completed, but there could still be more to come. In terms of the impact of that before moving to the external side [debt], this has clearly helped Ghana in terms of liquidity. So the interest due is much lower, and the principal repayment will also be much lower in the near term. I think we are estimating that in 2023, this means 5% of GDP less in debt service interest in principal. So that's quite meaningful.”

Moreover, despite the improvement in liquidity, Mr Iles noted that Ghana's solvency issues have not been resolved.

“Though liquidity has improved, it doesn't really address Ghana's solvency issues. And so come three or four years from now, when coupon rates pick up again, repayment picks up again, and the problem starts again. That's why there are these negotiations remaining with Eurobond holders which must be completed.”