The discovery of oil in Ghana has the potential to improve the country's sovereign creditworthiness over time, but much will depend on how the authorities there manage the new revenue stream, ratings agency Fitch said Friday.

In its new sovereign report on the country, Fitch said Ghana faces difficult times ahead of its future oil producer status.

"While the recent discovery of oil points to a brighter medium-term outlook, there is a compelling case for a new IMF [International Monetary Fund] agreement to help bridge Ghana's external financing needs in 2009-10 and stabilize sovereign creditworthiness," said Paul Rawkins, senior director at Fitch's London-based sovereign ratings team.

Ghana is the world's second largest cocoa producer after neighboring Ivory Coast and Africa's second largest gold producer after South Africa.

The West African nation has been struggling with budget deficits and trade imbalances after the cost of food and fuel imports surged to record highs last year.

The budget deficit stood at a provisional 14.9% of gross domestic product in 2008, but the country's president, John Atta-Mills, has announced plans to reduce the deficit to 9.4% of GDP by the end of this year.

Despite this strong will, the country will still face tight fiscal and external financing constraints in 2009-2010, Fitch said in its report.

Therefore, securing a new IMF agreement would help close this external financing gap and instill greater macroeconomic stability during the current global financial crisis, the rating agency said.

"An IMF agreement could also provide the government with the necessary breathing space to tackle unpopular structural reforms and put public finances on a more sustainable footing before Ghana starts to reap the fruits of its new found oil wealth," Fitch said.

Fitch currently rates Ghana's long-term foreign and local currency issuer default ratings at B+, with a negative outlook.