Ghana’s sovereign credit rating upgrade from Restricted Default to ‘B-’ with a Stable Outlook by Fitch Ratings marks a significant milestone in the country’s macroeconomic recovery. The move reflects growing investor confidence, improved policy credibility, and progress on debt restructuring. It also signals Ghana’s gradual re-entry into global capital markets after a period of severe fiscal and external imbalances.
The upgrade follows Ghana’s restructuring of $13.1 billion in Eurobonds and $5.1 billion in bilateral official debt under the G20 Common Framework. Although $2.6 billion in external debt, including $700 million in commercial obligations, is yet to be finalized, Fitch considers the risk of creditor non-cooperation to be low. This suggests a strong alignment between international stakeholders and Ghana’s recovery strategy.
This development restores a measure of Ghana’s international credit credibility and opens the door to moderate re-entry into capital markets,” says economic analyst and business journalist. However, this is only a foundation, not a finish line. Investor confidence must be reinforced by consistent policy delivery.
Macroeconomic indicators are also showing signs of resilience. In the first quarter of 2025, Ghana’s economy expanded by 5.3 percent year-on-year, exceeding the 4.3 percent forecast and outperforming the 4.9 percent growth recorded in the same period of 2024. According to the Ghana Statistical Service, this performance was largely driven by a rebound in agriculture, which grew by 6.6 percent due to better harvests and improved input supply chains. The services sector followed with 5.9 percent growth, while industry posted moderate gains.
This recovery can be attributed to a shift from public sector-led stimulus to private-sector productivity, particularly in agribusiness, logistics, and digital services. This rebound is a clear sign that the economy is decoupling from its reliance on oil and government capital spending. The early green shoots are coming from real productivity.
However, Ghana’s fiscal outlook remains under pressure. The primary deficit widened to 3.9 percent of GDP in 2024, missing the IMF programme’s target of a 0.5 percent surplus. The overshoot, largely attributed to election-year spending, underscores the persistent challenge of fiscal slippages during electoral cycles.
Finance Minister Cassiel Ato Forson has acknowledged the issue, stating: “Fiscal recklessness during election cycles has hurt Ghana’s credibility. We must institutionalize fiscal rules with enforceable consequences.” Tackie supports this view, calling for the establishment of an Independent Fiscal Council to monitor compliance, publish real-time expenditure data, and trigger corrective measures. “It’s time to embed fiscal discipline into our institutions rather than rely on political will,”.
Looking ahead, the government is targeting a 1.5 percent primary surplus in 2025, largely through expenditure rationalisation. However, Fitch projects only 0.5 percent, citing inflation-linked spending pressures and reform fatigue. Tackie emphasises the urgency of broadening the revenue base, warning that reliance on extractive taxes and payroll levies is no longer sustainable.
There is the need to increase VAT compliance, digitise property tax collection, and formalise parts of the informal sector. There must also be greater transparency in subsidy allocations and the finances of state-owned enterprises, which remain opaque and fiscally burdensome.
Despite improving debt dynamics — with debt-to-GDP forecast to decline to 60 percent in 2025 from 72 percent in 2024 and a peak of 93 percent in 2022 — Ghana’s interest-to-revenue ratio remains elevated at 26 percent, more than double the 13 percent median for similarly rated peers.
High debt service costs are crowding out investment in infrastructure, health, and education. Government must publish a Medium-Term Debt Strategy with transparent issuance calendars and risk guidelines. There must also be the creation of a Sovereign Wealth Buffer Fund, financed from gold and oil windfalls, to provide insurance against future shocks. without a mechanism to smooth volatility, will remain one external shock away from distress.”
The first maturities under the Domestic Debt Exchange Programme are due in 2027. Fitch estimates that Treasury bond redemptions will amount to 2.2 percent of GDP that year. Although the Bank of Ghana has begun cautiously reopening the domestic bond market, investor sentiment remains tentative. Shorter tenors and lower yields are encouraging,” notes Governor Dr. Johnson Asiama, but it will take time for the market to fully regain confidence.
There is a need to stress that a clearly communicated refinancing strategy and investor engagement framework must be developed now to avoid disruptions when maturity windows approach.
On the monetary front, the outlook is cautiously optimistic. Inflation is projected to fall to 15 percent in 2025 and to 10 percent by 2026, down from 23 percent in 2024. This trend is supported by currency stability, easing fuel and food prices, and restrained public spending. The Bank of Ghana is expected to begin cutting policy rates from July 2025, contingent on inflation dynamics and global conditions.
The Bank must remain data-driven and clearly communicate its monetary policy path. Premature easing could undo recent disinflation progress.
Foreign reserves are also recovering, projected to reach 3.9 months of import cover by 2026, up from 1.6 months in 2022. The improvement is largely driven by IMF disbursements and stronger current account balances. However, Fitch forecasts the current account surplus to narrow from 4.3 percent of GDP in 2024 to 1.1 percent by 2026, due to increased imports and softer global prices for Ghana’s key exports — gold, oil, and cocoa.
It cannot remain vulnerable to just three commodities. It’s time to invest in horticulture, processed foods, pharmaceuticals, and creative industries,” he says. He also urges faster execution of the African Continental Free Trade Area (AfCFTA) strategy to unlock regional trade.
In conclusion, Ghana’s upgrade is a milestone worth celebrating. It reflects regained investor trust and tangible macroeconomic progress. But the real challenge lies in institutionalising reforms that survive political cycles, managing debt more strategically, and building long-term resilience.
Bank of Ghana Governor Dr. Johnson Asiama remains optimistic. Speaking recently, he said: “I wish to assure the public that Ghana’s macroeconomic buffers are stronger today than they have been in recent years. Our foreign reserve position, inflation trajectory, and fiscal adjustment efforts provide a solid cushion.”
This is a window of opportunity. To fully restore market confidence, Ghana must go beyond debt restructuring and inflation control. The real challenge is locking in a durable fiscal and institutional framework that withstands political cycles. That’s how we turn a credit rating upgrade into lasting economic resilience.
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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.
