Fitch upgrades Ghana’s credit rating - Cites strong economic management

Global credit rating agency, Fitch Ratings, has upgraded the country’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from ‘Restricted Default’ to ‘B-’ with a Stable Outlook, indicating a vote of confidence in Ghana’s economic recovery efforts.

Fitch’s report pointed to Ghana’s rapidly improving macroeconomic indicators, including a projected decline in inflation from 23 per cent in 2024 to 15 per cent in 2025 and further to 10 per cent in 2026.

The report also emphasised the importance of sustained policy discipline, continued reserve accumulation and inflation management.

The recent sharp appreciation of the cedi, driven by increased foreign exchange inflows and policy reforms, has played a crucial role in stabilising prices and reducing external vulnerabilities.

The favourable rating, which reverses the country’s previous rating from ‘junk’ status, marks Ghana’s first upgrade since the debt restructuring process began.

The upgrade follows Ghana’s successful restructuring of $13.1 billion in Eurobond debt and steady progress towards completing the remaining external debt arrangements.

Fitch highlighted the government’s decisive fiscal measures, prudent debt management and the restoration of relations with commercial creditors as key drivers of the improved rating. 

Context

This outcome follows deliberate policy interventions led by the Ministry of Finance to strengthen foreign reserves and manage liquidity pressures.

Prof. Peter Quartey, Director, ISSER

Since assuming office, the Minister of Finance, Dr Cassiel Ato Forson, has led a bold fiscal and economic programme aimed at restoring stability and credibility to the economy.

Under his leadership, the government has implemented tough fiscal consolidation measures and prioritised rebuilding investor confidence.

Public debt, which peaked at 93 per cent of Gross Domestic Product (GDP) in 2022, is forecast to fall to 60 per cent by the end of this year.

A source at the Ministry of Finance said the remarkable turnaround was achieved through a combination of debt restructuring, exchange rate gains, nominal GDP growth and disciplined fiscal management.

“The successful drop in T-bill yields in recent months has also eased domestic liquidity risks and reduced debt servicing costs,” the source said. 

Growth

The economy has also been growing. It has posted 5.3 per cent growth year-on-year in the first quarter of 2025, marking an acceleration from the revised 4.9 per cent growth recorded in the same period last year.

Prof. John Gatsi, former Dean, University of Cape Coast School of Business

Projections remain strong for the GDP growth rate of four per cent for 2025 and 4.5 per cent for 2026, underpinned by a recovery in agriculture and steady expansion in the industrial and services sectors.

The source at the Finance Ministry said Fitch’s upgrade was a clear message to investors, markets and development partners about the positive trajectory of Ghana’s economy under the current financial leadership. 
 

Economists’ advice

Two economists have advised the government to leverage the momentum from Fitch’s credit upgrade to further implement prudent fiscal policies and structural reforms to build a robust economy resilient to global shocks and foster sustainable growth.

The Director of the Institute of Statistical, Social and Economic Research (ISSER), Prof. Peter Quartey, and the former Dean of the University of Cape Coast School of Business, Prof. John Gatsi, stressed the need for the government to transform the agricultural sector through expanded irrigation, value addition and strategic food storage to tackle persistent food inflation.

With improved reserves, fiscal discipline and exchange rate stability already in motion, the economists were of the firm belief that the country had the capacity to sustain long-term economic growth through consistent, inclusive policy choices.

The economists were unanimous in their advice for the government to continuously monitor fiscal, monetary and global developments as they were essential to safeguard the progress made and ensure lasting economic transformation.

Caution

Prof. Quartey stated that the recent credit rating upgrade to B- by Fitch Ratings reflected Ghana's notable progress in debt management and economic growth, driven by successful fiscal consolidation efforts and significant debt restructuring initiatives that had enhanced the country's economic stability and credibility.

“I think the upgrade is expected, given that we have been able to manage and reduce our debt-to-GDP ratio to about 55 per cent, the appreciation of the cedi among the general economic growth, and of course, all of these also have some link with our fiscal performance.

“If you look at each rating and what sort of indicators they use, they look at your fiscal position, fiscal outlook and each of these looks positive. So, I think it is to be expected in my view that we will get an upgrade,” Prof. Quarter said.

However, the Director of ISSER, a research body within the University of Ghana, said the government must take the rating agency’s caution on complacency seriously, because it cited high interest payment-to-revenue ratio and incomplete debt restructuring as risks.

He said the government still needed to address the $2 billion external debt restructuring, including negotiations with the African Development Bank.

Prof. Quartey added that to maintain stability, the government should build buffers against global uncertainty and commodity price fluctuations.

He listed fiscal discipline, increased revenue mobilisation and value-for-money spending as crucial for long-term stability.

“Investing in infrastructure, such as roads and storage facilities, can boost agriculture and economic growth. Ghana should prioritise sustainable borrowing, legislating debt ceilings and fighting corruption to ensure economic resilience,” the ISSER director added.

Sustainability

Prof. Gatsi said sustainability remained the cornerstone of every thriving economy and required consistent efforts to maintain macroeconomic stability, exchange rate equilibrium and inclusive growth that benefited businesses, households and government alike.

To achieve that, the professor of finance said economic managers must adopt and implement forward-thinking policies that did not only sustain current gains but also created long-term resilience against both domestic and global shocks.

“Ghana has shown strong capacity in this regard — improving fiscal discipline, strengthening reserve buffers, managing debt prudently and demonstrating clear signs of economic recovery — all of which indicate that the country is on the right track,” Prof. Gatsi said.

He said the government's adherence to its debt repayment roadmap, especially for domestic debt, underscored a high level of fiscal commitment and discipline, dispelling fears of default and reinforcing investor confidence.

Prof. Gatsi indicated that the progress was validated not only by the International Monetary Funds (IMF), the World Bank, and global credit rating agencies but also internally by think tanks, analysts and the public who recognise that significant improvements had been made.

The professor of finance said the cedi’s appreciation, coupled with the operationalisation of the Sinking Fund, had positively impacted external debt servicing and reduced the country's perceived risk, further lowering the cost of borrowing.