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Ghana has suffered another blow as its credit rating has been downgraded by Fitch Ratings from B- to CCC.<\/strong><\/p>\n This rating did not come with an outlook because\u00a0Fitch typically does not assign outlooks to ratings of \u2018CCC+\u2019 or below.<\/p>\n This update follows Standard and Poor\u2019s (S&P) downgrade of Ghana\u2019s foreign and local credit ratings from B-B\u2019 to CCC+C with a negative economic outlook.<\/p>\n Ghana\u2019s January 2022 B- rating from Fitch came with a negative outlook.<\/p>\n Eight months down the line, the agency says the downgrade reflects the deterioration of Ghana\u2019s public finances.<\/p>\n It said this has \u201ccontributed to a prolonged lack of access to Eurobond markets, in turn leading to a significant decline in external liquidity.\u201d<\/p>\n Fitch expects Ghana\u2019s international reserves to fall to close to two months of current external payments by end-2022 without any new external financing sources.<\/p>\n After a rough 2022 that has seen Ghana in the throes of an economic crisis, the Akufo-Addo administration has turned to the IMF for a support programme.<\/p>\n Fitch noted that the government\u2019s high-interest costs and structurally low revenue as a percentage of GDP have increased the likelihood that IMF support would necessitate some form of debt treatment.<\/p>\n It expects a deal with the IMF to crystalise within the next six months.<\/p>\n \u201cWe estimate that a programme could disburse as much as USD3 billion and unlock budget support from other multilateral lenders.\u201d<\/p>\n However, Fitch feels that the timing of such a deal is uncertain \u201cand would be dependent on the government\u2019s ability to present a credible fiscal reform plan in line with increasing government revenue and improving debt affordability metrics.\u201d<\/p>\n The ratings agency estimates that Ghana faces $2.75 billion of external debt servicing in 2022, including amortisation and interest, and $2.8 billion in 2023.<\/p>\n For the remainder of 2022, Fitch expects the government to meet its external debt obligations through a combination of a $750 million term loan from the African Export-Import Bank (BBB), $250 million in syndicated loans from international commercial banks, and up to $200 million from the government\u2019s sinking fund.<\/p>\n