S&P GLOBAL Ratings has upgraded Ghana’s foreign-currency credit rating from ‘Selective Default’ (SD) to ‘CCC+’, reflecting significant progress in the country’s economic recovery.
The upgrade follows Ghana’s successful restructuring of the majority of its sovereign debt, with only 2.6 billion in remaining obligations, 0.72 billion of which S&P classifies as debt to commercial creditors.
This development comes after Ghana’s near 30 billion debt default in 2022. The restructuring is expected to reduce Ghana’s debt by4.7 billion and offer cash flow relief worth $4.4 billion during the International Monetary Fund (IMF) programme.
The country’s economy has shown signs of recovery, with growth hitting 6.9% in the second quarter of 2024, the highest in five years, according to the Ghana Statistical Service.
In addition to S&P’s upgrade, other global ratings agencies have also improved Ghana’s credit ratings. Fitch upgraded the country’s Long-Term Local-Currency Issuer Default Rating (IDR) from ‘CCC’ to ‘CCC+’, and Moody’s raised the ratings from ‘Caa3’ and ‘Ca’ to ‘Caa2’.
These upgrades are attributed to Ghana’s extensive debt restructuring, including the recently completed Eurobond exchange, which has eased the government’s financial pressures.
Finance Minister Dr. Cassiel Ato Baah Forson has been instrumental in these efforts, stating the government’s commitment to fiscal consolidation and economic stability.
The positive outlook from these rating agencies reflects the potential for liquidity risk to ease amid ongoing fiscal consolidation efforts supported by the IMF programme.
As Ghana continues to implement structural reforms and maintain economic discipline, these credit rating upgrades signal increased investor confidence in the country’s economic trajectory.
Source: Nationaltyme.com
