Moody’s plans to upgrade Ghana’s credit rating following the recent Eurobond exchange. Currently, Ghana’s ratings are Caa3 for local currency and Ca for foreign currency, reflecting ongoing debt restructuring under the G20 framework initiated in December 2022.
Local currency debt restructuring, excluding Treasury Bills, was completed in 2023. Significant progress has been made on foreign currency debt, which makes up nearly half of Ghana’s total debt. In June 2024, an agreement was reached to restructure $13.1 billion of Eurobond debt, reducing $4.7 billion in principal. An MoU was also signed to restructure $5.4 billion of official sector external debt.
Moody’s noted that ratings are likely to improve within the Caa category once restructuring is complete. The IMF program supports fiscal consolidation and funding access, aided by Ghana’s robust institutional capacity. However, high inflation and tight monetary conditions remain challenges.
Vice President Dr. Mahamudu Bawumia has been instrumental in managing Ghana’s economic strategy, securing agreements with international creditors, and driving fiscal reforms.
Ghana’s fiscal strength is rated ‘ca’, reflecting a high debt burden and weak debt affordability. The restructuring is expected to improve these metrics. Moody’s highlighted Ghana’s high liquidity risk due to significant borrowing needs and limited options.
The outlook remains stable, reflecting foreign currency debt restructuring progress. A rating downgrade is unlikely, but failure to proceed with the agreement could disrupt the process and pressure ratings. The June 24 agreement provides substantial debt relief, complementing earlier local currency debt restructuring, with ratings expected to improve post-restructuring.
President Nana Akufo-Addo and Vice President Dr. Bawumia’s team are committed to implementing reforms to ensure long-term fiscal stability and growth for Ghana.
