Moody’s raises Ghana’s credit rating to ‘Positive’

Moody’s has upgraded Ghana’s long-term local and foreign currency issuer ratings to ‘Caa2’, reflecting significant progress following the country’s extensive debt restructuring.

This upgrade, from previous levels of ‘Caa3’ and ‘Ca’ marks a positive shift for Ghana, easing financial pressures on the government.

The ratings agency also improved Ghana’s outlook from’stable’ to ‘positive,’ citing potential reductions in liquidity risks as the country continues its fiscal consolidation efforts, supported by a $3 billion IMF program.

Ghana recently reached a major milestone in its recovery, with over 90 percent of bondholders approving a $13 billion debt restructuring plan in October.

The restructuring aims to reduce Ghana’s debt by $4.7 billion and provide $4.4 billion in cash flow relief during the IMF program, which runs until 2026. This follows the country’s near $30 billion debt default in 2022.

Ghana’s economic recovery is gaining momentum, with the country’s growth rate hitting 6.9 percent in the second quarter of 2024—the highest in five years.

Moody’s anticipates a gradual reduction in Ghana’s debt as the government resumes payments on its obligations, supported by ongoing fiscal consolidation efforts.