Fitch projects Zambia, Ghana to emerge from default on foreign-currency debt in 2024

Zambia and Ghana are projected to emerge from default on their foreign-currency debt in 2024, according to expectations from Fitch, a rating agency

In its Regional Sub-Saharan African Sovereigns Outlook 2024, Fitch forecast gradual fiscal consolidation due to financing constraints and fiscal reform efforts, which, in many cases, were linked to International Monetary Fund (IMF) programmes.

According to Fitch, this consolidation would help government debt/GDP to broadly stabilise.

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“We expect Ghana and Zambia to emerge from default on their foreign-currency debt in 2024, although, in both cases, the debt restructuring process under the Common Framework is vulnerable to further delays,”Fitch stated.

The firm indicated that the macro outlook for sub-Saharan Africa in 2024 including Ghana, pointed to stable median real Gross Domestic Product growth and lower average inflation, which nonetheless remained high across a number of sovereigns.

“The macro outlook for sub-Saharan Africa (SSA) in 2024 points to stable median real GDP growth and lower average inflation, which nonetheless remains high across a number of sovereigns,” it indicated.

Fitch, however, expected financing challenges to persist as most Sub-Saharan African sovereigns did not have affordable access to international capital markets without credit enhancements.

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