Moody’s Upgrades Ghana’s Ratings Outlook to Positive
Moody’s Ratings has changed the Government of Ghana’s outlook to positive from stable and affirmed the long-term issuer ratings in local and foreign currency, as well as the foreign-currency senior unsecured debt ratings at Caa1.
The foreign and local-currency senior unsecured MTN program ratings have been affirmed at (P)Caa1, according to Moody’s.
Ratings analysts said the change in outlook to positive is driven by the increasing likelihood of a durable improvement in domestic financing conditions, which will contribute to lasting improvements in Ghana’s debt affordability and government liquidity.
Moody’s noted that the country’s domestic financing costs have declined amid monetary easing and an improved fiscal position, while the resumption of domestic bond issuances will, if sustained, gradually reduce rollover risk.
The outlook period will assess the resilience of these trends to domestic and global developments, including inflationary risks from the Middle East conflict, given Ghana’s susceptibility to terms-of-trade volatility.
The affirmation of Ghana’s Caa1 rating reflects credit constraints, including the government’s limited financing options and reliance on short-term domestic issuances, weak debt affordability – exacerbated by a narrow revenue base – and high susceptibility to exchange rate and commodity price volatility.
Moody said that an elevated reliance on gold, in particular, exposes Ghana to any future price moderation.
These constraints are balanced by fundamental credit supports, including a track record of financing support from multilateral creditors, anchored by IMF programmes, a more moderate debt burden anchored by nascent improvements to the fiscal framework, and a track record of political stability and the relative strength of legislative and executive institutions.
Ghana’s local currency (LC) and foreign currency (FC) country ceilings remain unchanged at B1 and B2, respectively. Non-diversifiable risks are captured in a LC ceiling three notches above the sovereign rating, taking into account relatively predictable institutions and government actions, limited domestic political risk, and low geopolitical risk; balanced against a large government footprint in the economy and the financial system and external imbalances.
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 policy effectiveness.
The change in outlook to positive is driven by the increasing likelihood of a durable improvement in domestic financing conditions, amid monetary easing and improved macroeconomic stability.
Auctioned T-bill rates have remained on a downward trend, with the 364-day rate falling to 9.8% in end-March from 12.9% in September 2025 and 30% at the end of 2024.
With financing, since domestic debt restructuring has predominantly been conducted through T-bills, the impact has been quickly channelled into the government’s interest payment bill.
Interest payments amounted to 22.2% of government revenue in 2025, the lowest ratio since 2013, when excluding the debt restructuring years. Domestic funding accounted for 83% of the interest bill last year and is therefore key to driving liquidity risk and debt affordability.
A stronger currency, reduced food price inflation, and fiscal policy tightening have supported the deceleration of headline inflation to 3.2% as of March 2026, below the Bank of Ghana’s (BoG) 8% ± 2% target range.
The BoG has cut its monetary policy rate by a total of 1400 basis points since its easing cycle started in July 2025, to 14.00%. A positive real interest rate and muted core inflation excluding energy and utility (3.1% in February) provide some policy room.
The BoG has also taken steps to improve exchange rate flexibility, for example, by adopting a rules-based foreign exchange intervention framework.
“We now expect debt affordability to remain broadly steady, with interest payments amounting to around 20-25% of revenue through to 2028, down from 25-30% in our previous projections, assuming that current trends persist”.
However, inflation dynamics remain subject to significant foreign-exchange pass-through, increasing the importance of exchange rate stability and fiscal discipline to preserve macroeconomic stability.
The ramifications of the Middle East conflict on global energy prices introduce new inflationary risks, given Ghana’s position as a net fuel importer, notwithstanding domestic oil and gas production.
Concurrently, the resumption of longer-dated domestic bond issuances, if sustained, will gradually ease domestic rollover needs. The Ministry of Finance announced in March the expiration of the restrictions on new domestic bond issuance, after an earlier resumption was constrained by the terms of the February 2023 domestic debt exchange programme (DDEP).
Ghana issued a new benchmark seven-year bond in April, the first bond issuance since the DDEP. We expect that conditions have been met for a continued resumption of medium and long-term domestic debt issuance, although the extension of the maturity curve is likely to be gradual.
The affirmation of Ghana’s Caa1 rating reflects credit constraints, including the government’s limited financing options and reliance on short-term domestic issuances, weak debt affordability – exacerbated by a narrow revenue base – and high susceptibility to exchange rate and commodity price volatility.
Elevated reliance on gold, which accounted for around two-thirds of goods exports in 2025, exposes Ghana to any future price moderation. A material drop in gold prices would weigh on terms of trade, reduce foreign exchange inflows, and likely lead to exchange rate pressures and higher inflation.
At the same time, the flexibility of fiscal policy is constrained by low revenue generation: the government revenue ratio was 15.7% of GDP in 2025, compared to a median of 22% across Caa-rated peers, and by a comparatively high interest payments bill.
Although efforts are ongoing to address longstanding issues in the energy, cocoa, and financial sectors, these sectors remain a fiscal risk. Ghana also remains vulnerable to foreign currency risk, with close to half of its debt denominated in foreign currency.
Reliance on short-term domestic issuances results in large annual debt service requirements and elevated rollover risk, with 39.6% of domestic debt maturing in one year as of December 2025, up from 28% in 2023.
These constraints are balanced by fundamental credit supports, including an improved track record of financing support from multilateral creditors, anchored by IMF programmes, a more moderate debt burden, and a track record of political stability and the relative strength of legislative and executive institutions.
“We estimate that Ghana’s public debt burden fell to less than 50% of GDP in 2025 from 70% of GDP in 2024, reflecting currency appreciation and fiscal consolidation, anchored by nascent improvements to the fiscal framework”.
Moreover, Ghana’s data reporting is highly transparent by regional standards, reflecting the strength of the institutions responsible for data dissemination and supporting policy effectiveness. Fitch Affirms Nigeria at ‘B’; Outlook Stable
