Moody’s, the global credit ratings agency, has upgraded Ghana’s long-term local and foreign currency issuer ratings to “Caa2” from previous ratings of “Caa3” and “Ca.”
The upgrade reflects the positive impact of Ghana’s extensive debt restructuring efforts, which have significantly eased the government’s financial burdens.
Additionally, the agency has revised Ghana’s outlook from “stable” to “positive,” highlighting the potential for further improvements in liquidity as the country continues its fiscal consolidation efforts, supported by an ongoing International Monetary Fund (IMF) programme.
Last week, the IMF staff reached an agreement with Ghana on the third review of its $3 billion loan programme, a crucial element in the country’s recovery process. Earlier in October, more than 90% of Ghana’s bondholders approved a $13 billion debt overhaul, allowing the country to navigate its way out of the $30 billion debt default that occurred in 2022.
Ghana’s debt restructuring is expected to lower the overall debt stock by $4.7 billion and provide relief worth $4.4 billion during the IMF programme, which runs until 2026. Furthermore, the country has been experiencing positive economic growth, with its statistics agency reporting a 6.9% expansion in the second quarter of 2024—the fastest pace of growth in five years.
Despite the ongoing debt reduction efforts, Moody’s expects that Ghana’s debt levels will continue to decrease, albeit at a slower pace, as the government resumes payments on interest and principal obligations. This recovery marks a significant step in Ghana’s journey towards financial stability and economic growth.
