Fitch warns of Ghana's high Interest burden and liquidity pressures

A new report by Fitch Ratings Agency has highlighted the significant economic challenges facing Ghana, despite efforts to restructure its debt and stabilize its economy. The report notes that Ghana's interest-to-revenue ratio is expected to remain high, reaching 29% in 2025 and 30% in 2026.

This high ratio, combined with a significant interest burden, poses a major challenge to Ghana's economic recovery.

The report also notes that Ghana's debt restructuring efforts, while yielding some positive results, are not enough to address the country's underlying economic challenges. As a result, Ghana's economic outlook remains challenging, with significant risks to its fiscal stability.

Associate Director for Europe, Middle East, and Africa Sovereign Ratings at Fitch, Thomas Garreau, emphasized the need for Ghana to implement drastic fiscal measures to address its economic challenges and alleviate liquidity pressures.

“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,'' he stated.

Fitch's report highlights the need for sustained fiscal discipline and aggressive reforms to stabilize Ghana's economy.

Source: Lead News Online