Fitch warns USAID cuts could undermine Ghana’s external account gains
Global ratings agency Fitch Solutions has raised alarms over potential negative impacts of USAID funding cuts on Ghana’s current account surplus, warning of long-term implications for the country's external stability.
In a recent report, Fitch emphasised that USAID has long supported key sectors such as health, education, agriculture, and governance in Ghana, and that reductions in aid could significantly disrupt economic development and essential services.
“While Ghana’s current account position has improved due to higher gold and cocoa export earnings and reduced import bills, aid remains an important non-debt-creating source of inflows,” the report stated.
Fitch noted that international aid currently accounts for nearly half of Ghana’s net transfers, making it a critical component of the country’s external accounts. The agency cautioned that a slowdown in aid, particularly from the U.S., could weaken Ghana’s ability to withstand shocks, especially in times of tightened external financing or export underperformance.
Although the country’s gross international reserves recovered in 2024 to $6.95 billion (3.0 months of import cover), sustained stability may depend on the successful completion of debt restructuring programs and renewed capital inflows, according to Fitch.
