Global credit ratings agency, Moody’s, has upgraded Ghana’s long-term local and foreign currency issuer ratings to ‘Caa2,’ up from the previous ratings of ‘Caa3’ and ‘Ca.’
This upgrade represents a significant improvement for Ghana, largely driven by the country’s comprehensive debt restructuring efforts, which have helped reduce financial pressures on the government.
In addition to the rating upgrade, Moody’s has shifted Ghana’s economic outlook from ‘stable’ to ‘positive.’
The agency cited the potential for further easing of liquidity risks, underpinned by Ghana’s ongoing fiscal consolidation efforts and its $3 billion loan agreement with the International Monetary Fund (IMF).
According to Moody’s, the positive outlook reflects "the potential for liquidity risk to ease amid ongoing fiscal consolidation efforts supported by an IMF programme."
The news comes after the successful conclusion of the third review of Ghana’s IMF programme, which has played a crucial role in stabilizing the economy.
In October, more than 90 percent of bondholders approved a $13 billion debt restructuring plan, a critical step in Ghana’s recovery from its near $30 billion debt default in 2022.
The restructuring is projected to reduce the country’s debt burden by $4.7 billion and provide $4.4 billion in cash flow relief over the course of the IMF programme, which runs until 2026.
Ghana’s economic recovery is showing promising signs, with second-quarter growth for 2024 hitting 6.9 percent, the highest in five years, according to the Ghana Statistical Service.
Moody’s also forecasts a gradual reduction in Ghana’s debt levels as the government resumes payments on its obligations.
This rating upgrade is seen as a boost to investor confidence and signals further stabilization for Ghana’s economy in the coming years.
Story by: Joshua Kwabena Smith
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