03 Dec Ghana will not default in repayment of loans says Fitch
By Enoch Adjei
Dateline Africa News Correspondent
The rating agency, Fitch, says African nations like Ghana that have credit ratings of B and stable outlook will not default in repayment of their loans despite rising debt levels.
Ghana’s debt-to Gross Domestic Product (GDP) ratio hit about 71% at the end of September this year, after borrowing about GH¢273 billion.
This was equivalent to $48 billion.
Addressing investors on the outlook of Sub Saharan African Sovereigns and Debt Markets, Head of Middle East & Africa Sovereign Ratings, Jan Friederich, said the covid-19 pandemic has brought some elements of risks to Ghana and other Sub Saharan African nations but these nations are capable of repaying their debt.
“Look at the countries that are currently at triple C which are Cape Verde, the Republic of Congo and Mozambique- and all these countries-now have debt ratios above 100% of GDP. And our definition of triple C doesn’t mean that the risk of a default is a real possibility”, he said.
“Most of the other Sub-Saharan African countries [Ivory Coast, Ghana and Nigeria] are rated at B which means that there is a material risk of default but limited marginal safety remains. So, we are simply not expecting default for this countries. But we need to emphasize that of course the crisis have means that risk levels are really exceptional, he emphasized.
“So, we are emphasizing the role of the international financial institutions in potential routes or path towards a default. The World Bank and the IMF have recently been particularly clear that they advise all countries where debt levels are already at unsustainable levels to try to restructure that as soon as possible”, further pointed out.
There had been some debate about the rising debt of the country, Jan Friederich said.
Between July and September 2020, Ghana added ¢10.7 billion to its public debt stock.