Ghana may experience a debt default, according to Mahin Dissanayake, a senior director at the ratings company Fitch. He explained that because banks in Ghana depend so heavily on government securities, any debt trouble the government experiences will have a devastating impact on the viability of banks. Mahin Dissanayake reportedly made the remarks on September 21, 2022, at a news conference, according to Reuters.

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He declared that default was a definite possibility. He asserted that the "operational climate is looking very vulnerable" because "Ghanaian banks...hold huge volumes of government securities, so debt distress is going to put a lot of stress on the banks." He also stated that in the case of debt distress, the banking sector will not be the only affected sector.

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"We estimate that if there was a 30% haircut, that would make at least several banks insolvent. It's not just the banking sector that would be affected but also insurance companies, pension funds, asset managers - anyone who holds government securities," he stressed. In August this year, rating agencies downgraded Ghana’s creditworthiness status to junk.

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This has affected the country’s ability to secure credit facilities from the global market. Inflation has skyrocketed to an all-time high of 33.9% s the cedi continues to depreciate against major trading currencies. Meanwhile, three Ghanaian banks have also been downgraded by Fitch.

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