Moody’s Upgrades Ghana’s Credit Ratings, Changes Outlook
Moody’s Ratings has upgraded the Government of Ghana’s long-term foreign-currency and local-currency issuer ratings to B3 from Caa1 and changed the outlook from positive to stable.
The global ratings agency also upgraded Ghana’s foreign-currency senior unsecured debt ratings to B3 from Caa1, and the foreign- and local-currency senior unsecured MTN program ratings to (P)B3 from (P)Caa1.
It said the upgrade reflects a sustained easing of Ghana’s domestic financing conditions, which has led to lower financing costs and a meaningful improvement in debt affordability, albeit from a weak level.
Financing costs have remained lower despite external headwinds from the Middle East conflict, reflecting continued fiscal discipline underpinned by institutional improvements and favourable export prices that support macroeconomic stability, Moody’s said.
Ratings analysts hinted that they expect these improvements to last.
At the B3 level, Ghana’s rating incorporates credit constraints including high susceptibility to terms-of-trade volatility and exchange rate depreciation, relatively low government revenue generation that constrains the flexibility of fiscal policy, and weak but improving policy effectiveness, Moody’s explained.
The rating note added that these are balanced by credit strengths including a more moderate debt burden, a track record of financing support from multilateral creditors, and a track record of political stability and the relative strength of legislative and executive institutions.
The stable outlook reflects expectation that Ghana’s macroeconomic stability and reduced government liquidity risks will be sustained, supported by favourable export dynamics, Moody’s said.
“Whilst the normalisation of the domestic bond market remains at an early stage, we expect increasing issuances of longer-maturity instruments to gradually lower elevated rollover risk”.
On the upside, Moody’s said a lengthening track record of fiscal discipline and ongoing progress in building external buffers could enhance Ghana’s resilience to future terms-of-trade shocks.
Ratings analysts stated that downside risks stem mainly from high susceptibility to exchange rate and commodity price volatility and sizeable fiscal risks related to the financial performance of state-owned enterprises, notwithstanding ongoing efforts to address longstanding issues in the energy and cocoa sectors.
Ghana’s local currency (LC) country ceiling has been raised to Ba3 from B1 and the foreign currency (FC) country ceiling to B1 from B2.
The country’s non-diversifiable risks are captured in a LC ceiling three notches above the sovereign rating, taking into account relatively predictable institutions and government actions and the track record of political stability, balanced against a large government footprint in the economy and the financial system.
The FC country ceiling one notch below the LC country ceiling reflects the authorities’ history of providing access to foreign exchange, notwithstanding constraints on capital account openness and weak, albeit improving, policy effectiveness.
Moody’s revealed that the upgrade captures the improvement in Ghana’s debt affordability, albeit from a weak level, as a result of a sustained easing in Ghana’s domestic financing conditions supported by fiscal discipline and macroeconomic stability on the back of favourable commodity prices.
Financing costs have remained lower despite global headwinds, supporting a sustained decline in the government’s interest payment bill relative to revenue. Ghana’s interest payments were 24% below the budget target in the first half of this year and amounted to 17.2% of government revenue for that period, the lowest ratio since 2012 and a material credit improvement.
“We project interest payments to average around 20-25% of revenue through to 2028, down from 25-30% at the time of our upgrade of Ghana’s ratings to Caa1 in October 2025.
“That said, Ghana’s narrow revenue base continues to constrain fiscal policy flexibility and improvements in debt affordability relative to B-rated peers. A key underlying credit support has been an increase in the price of Ghana’s exports, which we expect to be sustained”.
As Africa’s largest gold producer, Ghana is a beneficiary of historically elevated prices for the commodity, with gold accounting for 67% of total goods exports in 2025, the ratings note said.
Ratings analysts reported that current account has been in surplus since 2024, a marked change following more than two decades of persistent deficits.
“While the growing share of gold in the export structure presents a concentration risk and exposes Ghana to a terms-of-trade reversal, we expect gold prices to remain elevated, underpinning sustained robust current account surpluses in the next few years”.
Moody’s highlighted that Ghana’s lower domestic financing costs reflect an easing of inflationary pressures, aided by exchange rate appreciation.
Inflation has remained contained below the Bank of Ghana’s (BoG) 8%±2pp target range, although the Middle East conflict has contributed to a pause in the BoG’s easing cycle and continues to pose risks.
The country’s inflation reached a trough of 3.2% in March 2026 before rising to 5.2% in September, even as improved exchange rate stability contained imported inflation.
Consequently, rates on the auctioned T-bills have remained below the Bank of Ghana’s 14% policy rate, with the 364-day rate ranging between 10-13% during the first nine months of this year, down from 2025 levels.
Given the dominance of T-bills in the government’s financing mix, lower domestic rates have translated quickly to a lower government interest payment bill. Continued fiscal discipline has also supported the improvement in funding costs.
“Restrained government spending, particularly on capital expenditure, supported a primary surplus outturn of more than 2% of GDP in 2025, a sharp turnaround compared to the primary deficit of 2.1% of GDP in 2024, and we expect the government to meet its primary surplus target of 1.5% of GDP for this year.
“The government debt burden, which under our perimeter includes the Ghana Cocoa Board (COCOBOD), domestic arrears to suppliers, and publicly guaranteed debt, has fallen to 48.8% of GDP in 2025 from 70.1% in 2024, reflecting currency appreciation and fiscal consolidation.
“We expect fiscal discipline to continue under a non-funded 36-month IMF Policy Coordination Instrument that has been agreed to anchor reform momentum and investor confidence following the completion of the Extended Credit Facility (ECF) programme in July”.
At the B3 level, Ghana’s rating incorporates credit constraints including high susceptibility to terms-of-trade volatility and exchange rate depreciation, relatively low government revenue generation that constrains the flexibility of fiscal policy, and weak but improving policy effectiveness.
Moody’s said these are balanced by credit strengths including a more moderate debt burden, a track record of financing support from multilateral creditors, and a track record of political stability and the relative strength of legislative and executive institutions.
The stable outlook captures balanced risks at the B3 level. We expect Ghana’s macroeconomic stability and reduced government liquidity risk to be sustained, underpinned by generally favourable external dynamics as well as emerging institutional improvements.
“We project government debt under our definition to remain stable at around 50% of GDP over the next several years. Although weak debt affordability will remain a key credit constraint, we expect government interest payments to stabilise at around 20-25% of government revenue, lower than during the decade leading to the debt restructuring.
“Whilst the resumption of longer-dated domestic bond issuances remains at an early stage, we expect increasing access to longer-maturity instruments to gradually reduce elevated rollover risk.
“On the upside, a lengthening track record of fiscal discipline and sustained progress in improving external buffers could improve resilience to terms-of-trade volatility.
“The government’s Ghana Accelerated National Reserve Accumulation Policy (GANRAP) targets increasing total international reserves but relies mainly on domestic gold purchases.
“While other focus areas of the policy, such as diversifying agricultural exports, strengthening digital financial systems to capture a larger share of remittance inflows, accelerating new oil field developments, stabilising the energy sector, and maintaining fiscal discipline, could more sustainably improve foreign exchange reserve accumulation, they will be more challenging to implement.
“Downside risks stem mainly from high susceptibility to exchange rate and commodity price volatility and sizeable fiscal risks. In particular, a large drop in gold prices would weigh on terms of trade, reduce foreign exchange inflows, and likely lead to exchange rate pressures and higher inflation.
“Fiscal risks stem from the weak financial performance of state-owned enterprises, the legal requirement to recapitalise the Bank of Ghana’s negative net equity position (6.7% of GDP in 2025) by 2032, and a track record of fiscal slippages during electoral cycles.
“Notwithstanding ongoing efforts to anchor greater fiscal discipline and address longstanding issues in the energy sector and COCOBOD, spending restraint is likely to be tested in the run-up to the 2028 election”. World Bank Group Appoints David Vaillant as MD, CFO
