Ghana Ratings Affirmed At ‘B-/B’; Outlook Remains Stable -S&P
S&P Global Ratings has affirmed its ‘B-/B’ long- and short-term foreign and local currency sovereign credit ratings on Ghana, with a stable outlook.
The global ratings agency also affirmed its ‘B-‘ transfer and convertibility assessment on Ghana, according to details from the latest update.
In the rating note, S&P said the stable outlook balances the potential for stronger balance-of-payments performance and improvements in Ghana’s fiscal outcomes as a result of ongoing fiscal reforms, against still-high debt service costs, reform implementation risks, and Ghana’s sensitivity to terms of trade, such as gold, cocoa, and oil prices.
“We could lower our rating on Ghana over the next 12-18 months if fiscal reform momentum stalled, materially raising fiscal deficits or debt service costs, while straining the government’s ability to refinance maturing debt as it comes due.
“The rating could also come under pressure if external imbalances weakened due to a deterioration in terms of trade or if export volumes weakened.
“Although not our base case, we could also consider a negative rating action if the remaining part of debt restructuring stalls, potentially stemming from disagreements between various groups of Ghana’s creditors over comparability of treatment principles and terms they receive under the G20 Common Framework restructuring process”, S&P stated in the rating note.
Ratings analysts said they could raise the rating in the next 12-18 months if Ghana maintained low fiscal deficits, reducing debt service costs and strengthening its access to foreign financing, while its external position continued to strengthen, including via the accumulation of additional foreign currency reserves.
Ghana is nearing the completion of its comprehensive government debt restructuring process following its default in December 2022.
The government successfully exchanged its local currency government debt in 2023, as well as $13.1 billion worth of eurobonds in October 2024.
“We understand the government has completed restructuring, or has agreements in principle (AIPs) to restructure close to 97% of debt within the perimeter of restructuring.
“It has also made progress more recently by agreeing restructuring terms with the African Export-Import Bank and reaching an AIP with holders of Saderea commercial notes.
“Previously, differences of opinions about preferred creditor treatment among creditors had held up the restructuring process. Saderea obligations relate to restructured notes initially intended to finance Ghana’s health sector”.
S&P said improving terms of trade, particularly elevated gold prices, has spurred growth and strengthened external balances.
This is demonstrated by a current account surplus of $9.35 billion in 2025, which is 8.1% of GDP and a rise in gross foreign currency reserves to a record-high of $14.5 billion.
While most of Ghana’s gold was transported to the Middle East, specifically Dubai, for refining, given the conflict in the Middle East, Ghana is currently shifting this to other markets, including India.
“We also note that Ghana’s new government, which came to power in December 2024, is enacting policies to safeguard against fiscal slippages, which were frequent.
“This includes a mandated 1.5% of GDP primary surplus on an annual basis, for debt to be brought to 45% of GDP by 2034 (although it may meet this target sooner), as well as a proactive framework for correcting future fiscal deviations”.
S&P said, “Fiscal revenue should also be supported by ongoing revenue reforms and relatively strong economic growth, which we forecast to average 5.5% through 2029.
“Despite the improvements, our rating on Ghana remains constrained by still-weak, albeit improving, institutional arrangements, and elevated government debt service costs.
“The economy is exposed to erratic weather and external shocks, particularly given its reliance on agriculture (20% of GDP), and gold exports (over 66% of goods exports in 2025).
“Exports could face pressure should gold prices fall more significantly than we currently anticipate, while agriculture could face challenges of higher fertilizer costs due to the conflict in the Middle East, which would also lead to higher inflation.
“We also note that the current administration’s fiscal reforms are still in their early stages and are thus untested through election cycles, with potential risks of fiscal slippages through to 2029”.
Ghana’s macroeconomic reforms and measures to strengthen public finances have improved growth and fiscal prospects, but are yet to be tested through economic and electoral cycles.
Public financial management reforms are progressing; however, pressures could begin emerging from the recent global shock to oil and gas prices and as the government resumes capital spending.
The country’s policy remains underpinned by an IMF program, which expires in May 2026. Although analysts anticipate government policy will remain focused on rebuilding fiscal headroom after program slippages, fiscal policy could loosen.
“We forecast real GDP growth of 5.5% per year on average through to end-2029, supported by strong gold exports, and still-favorable terms of trade”.
Ghana has been capitalizing on high gold prices, which has supported record export revenue and the rebuilding of buffers.
The economy expanded by 6% in 2025 and growth has been largely broad based, indicating strengthened consumer and business confidence on the back of improving macroeconomic conditions, including a more stable currency and inflation.
Since 2025, Ghana’s government has sharpened its focus on formalizing trade in the key gold sector, which has historically seen significant amounts of gold traded informally and illicitly.
A key initiative has been the establishment of the Ghana Gold Board (Goldbod) in March 2025, which has incentivized small-scale miners to obtain licenses and then channel their gold exports through Goldbod.
Gold production from small-scall miners currently accounts for about 60% of total gold production in Ghana, larger than the production from major international gold mining firms.
These initiatives have enabled the government to double gold export volumes from about 3.6 million fine troy ounces in 2023 to 6.2 million fine troy ounces in 2025.
Farming also remains a key sector for employment and, although improved weather conditions have benefited production, prices declined sharply due to rising supply on global markets.
This led to farmers receiving 25% less for their produce for the remainder of the 2026 season.
On balance, S&P analysts expect the ongoing conflict in the Middle East to weaken Ghana’s economy. Ghana remains a small, open economy and despite exporting crude, it remains a net oil importer.
Nevertheless, the effects of the ongoing conflict are likely to be partially mitigated because Ghana produces about 180,000 barrels of crude oil per day, between 300 million and 350 million standard cubic feet of gas per day for commercial use, and generated about $2.6 billion in hydrocarbon export receipts in 2025.
“We forecast Brent oil prices to average $80 per barrel in 2026 and then return toward $65 per barrel in 2027-2029. Nevertheless, we anticipate the spillover effects from rising international fuel and shipping prices tied to the Middle East conflict will start raising inflation in Ghana, thereby reducing consumers’ purchasing power and potentially dampening investor sentiment”.
At the same time, close to 20% of exports go to the Middle East, almost all of which is gold destined for the United Arab Emirates (UAE).
“We understand that gold is flown from Ghana to UAE, where some is refined and some is reexported to other refining centers, such as India.
“The government is working to move most of its gold refining outside the UAE and we currently do not expect this to significantly impact Ghana’s ability to sell its gold.
“Although we anticipate some fiscal slippage is likely to occur through to 2029, as the slowdown in the execution of the capital budget in 2025 has begun to unwind, the government is likely to remain broadly focused on containing fiscal pressures, even after the IMF program expires in summer 2026”.
To promote long-term fiscal discipline, Ghana reintroduced fiscal rules, including a mandated primary surplus and a debt ceiling, while establishing an independent fiscal council.
S&P said this framework includes expenditure controls and, in instances where breaches occur, requires the finance minister to present plans to bring fiscal deficits back to target within four months, and for the next annual budget to implement these measures.
“In our view, these measures should help reduce Ghana’s budgetary deficits, compared with past outturns. Fiscal rules are being supported by Ghana’s ruling party, the National Democratic Congress, which holds a 46-seat majority in the 276-member parliament.
“This enables the administration to advance its reform agenda while policy remains anchored by a $3 billion IMF Extended Credit Facility program, which runs until May 31, 2026”.
Nevertheless, the effectiveness of these new fiscal rules and measures is yet to be fully tested through the economic cycle–and especially the electoral cycle.
To that end, ratings analysts note that Ghana’s past recurrent weak fiscal performance, especially around election times, when public spending was frequently increased significantly faster than revenue growth and underpinned a steady rise in net general government debt, ultimately led to Ghana defaulting on its obligations in December 2022.
Ghana has not yet experienced significant spillover effects from regional instability and terrorism. However, the Sahel region has faced rising instability, which has been increasingly spreading southward, posing risks to Ghana.
The government is taking steps to address these vulnerabilities, including recently reaching a defence agreement with the EU to secure military equipment and bolster its cybersecurity and counterterrorism defences.
Flexibility and performance profile: Fiscal and balance of payments vulnerabilities have reduced, but global geopolitical tensions create challenges
“We forecast Ghana’s general government fiscal deficit to average 2.7% of GDP in 2026-2029, down from 10.7% in 2020-2022 during the lead up to the sovereign default and comprehensive debt restructuring.
“Despite reforms, fiscal flexibility remains constrained as spending on debt interest payments will still average a high 20% of government revenue through 2029, although this is significantly lower than the 44% average recorded in 2020-2022.
“We forecast Ghana will report a current account surplus over the next four years, supporting further accumulation of foreign currency reserves”, S&P said. Ghana’s fiscal position improved substantially in 2025 as the government heavily curtailed spending, particularly for capital projects.
This contrasts with major fiscal slippage in 2024 due to unchecked, uncoordinated spending by ministries, departments, and agencies in the lead-up to the December 2024 elections.
Capital spending in 2025 was 27% lower than budgeted, reflecting increased scrutiny of project implementation, requirements for approval by the Minister of Finance for procurement, and prioritisation of capital projects.
Non-oil tax revenue, particularly corporate income tax and mineral royalties, continues to benefit from an improving business environment and investment sentiment supported through lower inflation dynamics and the more stable exchange rate. However, this could come under threat given the conflict in the Middle East
The 2026 budget outlines the government’s plans to raise capital spending by 150% while boosting revenue through reforms. We anticipate this will result in a slightly wider fiscal deficit this year, although revenue measures being undertaken could offset more significant slippage.
A key component of this is the value-added tax (VAT) reform, which aims to simplify multiple levies (including the COVID-19 levies) and reduce the effective VAT rate to 20% from 21.9%.
It also aims to enhance collection through rolling out digital devices to increasingly capture revenue from the informal sector while implementing AI-driven solutions for customs revenue.
It also implemented a new sliding scale royalty system for the mining sector on March 9, 2026, while reducing the current fixed levy to 1% from 3%. The new framework aims to link royalty payments to global gold prices, increasing payments when prices rise and decreasing them when prices fall.
The levy reduction aims to balance revenue generation with sustaining investment in Ghana’s mining sector. GCR Revises GLNG Funding SPV Rating Outlook to Negative
