Fitch anticipates that Ghana's public sector debt will climb to 99% of Gross Domestic Product (GDP) by the end of 2023, up from 88% in 2022.

This projection is attributed to the depreciation of the cedi against the US dollar. Thus far, the local currency has experienced a devaluation of approximately 11.80% against the dollar in the retail market and 22% on the interbank market.

Fitch has noted that without a restructuring under the Common Framework, public sector debt is expected to decrease to 95% of GDP in 2024 and 94% in 2025. This would occur alongside ongoing fiscal consolidation efforts and stabilization of the cedi.

In contrast, the International Monetary Fund (IMF) had initially projected a reduction in Ghana's debt-to-GDP ratio for 2023, estimating it to be 84.9% compared to 92.4% in 2022.

According to the October 2023 Fiscal Monitor by the IMF, the nation's total debt-to-GDP ratio is predicted to progressively decline over the next five years.

Ghana's public finances faced challenges in the preceding year, leading to a prolonged inability to access the Eurobond markets, which subsequently impacted external liquidity.

These difficulties resulted in Fitch downgrading Ghana to 'CCC' in the prior year, followed by additional downgrades, ultimately culminating in the country's placement on restricted default ('RD') at the start of 2023. Fitch affirmed both the Long-Term Foreign-Currency (LTFC) and Long-Term Local-Currency (LTLC) Issuer Default Ratings (IDRs) at 'RD' on July 28, 2023.

Nevertheless, Fitch pointed out that foreign-currency debt comprises less than 40% of Ghana's total public debt, which is considerably below the 'B' median. Additionally, Ghana boasts superior levels of governance in comparison to the 'B' median and has a track record of democratic elections with peaceful transitions of power since 1992.

Nonetheless, Fitch expressed concerns about the nation's vulnerabilities, including its limited international liquidity position, low per-capita income, human development indicators, and a heavy reliance on exports of oil, gold, and cocoa, making it susceptible to fluctuations in commodity prices.