Fitch Forecasts Ghana and Zambia to Recover from Foreign-Currency Debt Default in 2024

In its 2024 Regional Sub-Saharan African Sovereigns Outlook, Fitch Ratings anticipates the resolution of default issues for Ghana and Zambia in relation to their foreign-currency debt by the end of 2024. The rating agency projects a positive trajectory for the two nations in terms of debt restructuring, citing gradual fiscal consolidation linked to financing constraints and fiscal reform efforts, often associated with International Monetary Fund (IMF) programs.

Fitch emphasized that the expected emergence from default is contingent on a debt restructuring process under the Common Framework, with a cautionary note regarding potential delays in both countries. The United Kingdom-based firm highlighted the broader macroeconomic outlook for sub-Saharan Africa, predicting stable median real Gross Domestic Product (GDP) growth and lower average inflation in 2024, despite persistent high inflation in several sovereigns.

However, Fitch underscored ongoing financing challenges for most Sub-Saharan African nations, citing limited affordable access to international capital markets without credit enhancements. The rating agency acknowledged multilateral funding as a crucial support mechanism for the region, while cautioning that risks persist with a downside bias.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top