International rating agency, Fitch, has noted that Ghana’s ability to secure an IMF bailout may be dependent on a number of factors including the country’s ability to achieve a debt-to-GDP ratio of 55%.

It added that the government’s ability to get financial assurances from external creditors.

A statement by Fitch said: “IMF support for Ghana will likely depend on the government's ability to show a path towards bringing the present value of debt to 55% of GDP over the forecast horizon on the basis of the IMF/World Bank debt sustainability analysis and the ability of official bilateral creditors to provide financing assurances in the context of the Common Framework external debt restructuring that authorities have requested.”

Fitch also projected that these requirements may not be attained before the end of the second quarter of 2023.

“Fitch does not expect the provision of financing assurances, which will pave the way for an IMF Board approval of the ECF arrangement and for a new debt sustainability analysis to be published, before the end of 2Q23,” it added.

Solvency Concerns Remain Critical

The domestic debt exchange has increased the debt-to-GDP ratio by 0.6pp with payment-in-kind coupons corresponding to an increase in the face value of the new bonds compared to the face value of tendered bonds.

Despite substantial redemption reprofiling and significantly lowered interest rates, the present value of public debt-to-GDP has been reduced by only 1pp using the standard 5% discount rates that apply in the IMF/World Bank debt sustainability framework for low-income countries. Fitch estimates the present value to be slightly above 100% after the completion of the domestic debt exchange.

IMF support for Ghana will likely depend on the government's ability to show a path towards bringing the present value of debt to 55% of GDP over the forecast horizon based on the IMF/World Bank debt sustainability analysis and the ability of official bilateral creditors to provide financing assurances in the context of the Common Framework external debt restructuring that authorities have requested.

Fitch does not expect the provision of financing assurances, which will pave the way for an IMF Board approval of the ECF arrangement and for a new debt sustainability analysis to be published, before the end of 2Q23.



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