Moody’s upgrades Ghana’s credit rating and shifts outlook to positive

Credit rating agency Moody’s has upgraded Ghana’s long-term local and foreign currency issuer ratings to “Caa2” from “Caa3” and “Ca,” respectively.

This upgrade comes from significant debt treatment that has alleviated the government’s financial burdens.

Additionally, Moody’s revised Ghana’s outlook from “stable” to “positive,” indicating a potential easing of liquidity risks amid ongoing fiscal consolidation efforts supported by the International Monetary Fund (IMF).

Just last week, the IMF and Ghana reached an agreement on the third review of the country’s $3 billion Economic Facility Credit (ECF) program, following a successful external debt restructuring.

Over 90% of Ghana’s bondholders approved a $13 billion debt overhaul, crucial for recovering from its nearly $30 billion debt default in 2022.

In July 2024, Moody’s indicated it would upgrade Ghana’s credit rating following the country’s Eurobond exchange.

The New York-based firm noted that its review of Ghana’s ratings, including local currency and foreign currency issuer ratings, reflects the government’s ongoing debt restructuring under the G20 common framework initiated in December 2022.

Notably, the restructuring of local currency debt, excluding Treasury Bills, was completed in 2023.

“The restructuring of foreign currency debt, which constitutes nearly half of Ghana’s total debt, has progressed significantly following announcements in June 2024 regarding a Memorandum of Understanding on official sector debt and an agreement in principle with bondholders”.