Global rating agency S&P Global Ratings has upgraded the country’s foreign-currency sovereign credit rating from Selective Default (SD) to CCC+.
“We affirmed our ‘CCC+’ issue ratings on Ghana’s debt. We also affirmed our ‘CCC+/C’ long- and short-term local currency ratings on Ghana. The outlook on both the foreign and local currency ratings is stable. Ghana’s transferability and convertibility assessment remains ‘CCC+’”, the rating agency stated in its May 9, 2025 assessment.
The agency however warns that Ghana’s credit rating could face downward pressure over the next 12 to 18 months if fiscal performance deteriorates or financing conditions tighten.
It noted that should such a development happen, it could further elevate the already high debt servicing costs on the country and constrain the government’s ability to refinance upcoming debt maturities which will pose renewed risks to fiscal and external stability.
“While some lenders could still become holdout creditors, the likelihood of related disruption or unwinding of the debt restructuring process is mitigated from the principles of comparability of treatment under the G20 Common Framework, most-favored creditor clauses in its restructured bonds, and the process’ advanced stage”, the rating agency added.
The Minister of Finance, Dr Ato Forson, indicates that the latest rating by the agency reflects renewed investor confidence and the positive momentum in economic management under his leadership.
According to the Minsiter, the announcement, made on May 9, 2025, comes as Ghana makes decisive progress in restructuring its external debt and stabilising its macroeconomic environment, following years of turbulence.
According to S&P’s latest report, Ghana’s negotiations with its remaining commercial creditors are nearing completion — a key milestone that has restored credibility and eased fiscal pressure.
S&P highlights that while challenges persist, the current administration’s firm commitment to reforms is yielding tangible benefits. Inflation, though still elevated at 22%, is steadily falling, driven by a strengthening cedi and lower energy prices.
This progress, according to the report, reflects strong policy direction from the Ministry of Finance under Dr Ato Forson.
He noted that his stewardship has seen the launch of vital legislative reforms, including amendments to the Public Financial Management Act, reinstatement of fiscal rules, and steps to establish an independent fiscal council — measures aimed at ensuring prudent management of public finances.
Despite inheriting significant fiscal arrears, the government is prioritising expenditure-led consolidation over aggressive tax hikes, in line with conditions under the IMF’s Extended Credit Facility (ECF) programme.
The administration is targeting a primary surplus of 1.5% of GDP in 2025 and has committed to keeping expenditure growth below 10% annually over the next four years — a sharp departure from the 28% average increase seen over the past two decades.
S&P projects that Ghana’s public debt, net of liquid assets, will decline from 71.4% of GDP at end-2024 to 47.4% by 2028.
Interest expenditure, once a crippling 48% of government revenue in 2021-2022, has fallen to about 25% following the debt restructuring.
Inflation, though still above target, is expected to ease gradually as monetary policy credibility improves.
The upgrade by S&P is a strong signal to the international investor community and development partners that Ghana is turning a crucial corner.
While acknowledging lingering risks, including election-year spending pressures and external vulnerabilities, S&P notes that the country’s improving external metrics, steady policy reforms, and supportive growth outlook justify the new, higher rating.
The Minsiter was optimistic that with him at helm of the Finance Ministry, Ghana’s economic management appears firmly back on track — a development likely to further bolster investor sentiment and set the stage for sustainable, inclusive growth in the years ahead.
By: Rainbowradioonline.com/Ghana
