In a major boost to Ghana’s economic prospects, Moody’s Investors Service has upgraded the country’s long-term local and foreign currency issuer ratings to Caa2 from Caa3.
This development marks a significant turnaround for Ghana, which has struggled with debt woes in recent years.
According to Moody’s, the upgrade reflects Ghana’s successful debt restructuring efforts, strong support from the International Monetary Fund (IMF), and commitment to fiscal consolidation.
The country’s economic growth momentum, with a 6.9% expansion in the second quarter of 2024, also contributed to the upgrade.
Ghana’s debt crisis began in 2022 when the country defaulted on its $30 billion debt, sparking concerns about its economic stability.
However, the government’s swift action to restructure its debt and implement fiscal reforms has paid off.
The debt restructuring plan, approved by over 90% of bondholders, involves reducing Ghana’s debt by $4.7 billion and providing $4.4 billion in cash flow relief.
This move has significantly improved Ghana’s fiscal outlook and enhanced investor confidence.
The IMF’s $3 billion loan program has also provided crucial support to Ghana’s economic recovery efforts.
Moody’s noted that the IMF’s backing has enhanced the country’s credibility and stability.
The positive outlook assigned by Moody’s reflects Ghana’s improved liquidity position, reduced debt burden, enhanced fiscal discipline, and strong economic growth prospects.
The upgrade is expected to attract foreign investment, boost economic growth, and stabilize Ghana’s fiscal outlook.
With an improved credit rating, Ghana can access international markets at lower borrowing costs, reducing its debt servicing burden.
-BY Daniel Bampoe