The economic recovery efforts have received a significant boost as international ratings agency Moody’s upgraded the country’s sovereign credit rating
The economic recovery efforts have received a significant boost as international ratings agency Moody’s upgraded the country’s sovereign credit rating, citing improved fiscal discipline, stronger external reserves, and better prospects for debt reduction.
In its latest review released on Friday, Moody’s Ratings announced that Ghana’s long-term foreign currency debt rating has been raised from Caa2 to Caa1, with the outlook revised from positive to stable.
The agency said the upgrade reflects the nation’s improving macroeconomic stability following a comprehensive debt restructuring program that began last year.
According to Moody’s, “greater macroeconomic stability and favourable external dynamics are supporting more controlled funding costs and foreign exchange reserve replenishment.”
The agency, however, cautioned that past budgetary overruns remain a risk, though it acknowledged that “nascent improvements to the fiscal framework will help anchor fiscal adjustment.”
Debt Restructuring And Fiscal Consolidation Efforts
The upgrade comes less than a year after the government, led by President John Mahama, initiated aggressive fiscal consolidation measures to stabilize an economy battered by debt distress and currency volatility.
Following his return to power in January 2025, President Mahama’s administration prioritized macroeconomic stability, fiscal discipline, and restoring investor confidence.
This policy shift was seen as crucial after Ghana underwent a painful domestic and external debt restructuring process that saw bondholders and international creditors accept significant losses to help reset the country’s financial footing.
The results are now showing. Data from the Finance Ministry indicates that Ghana’s public debt declined from 764 billion cedis (64.9% of GDP) in mid-2024 to 629 billion cedis (44.9% of GDP) as of July 2025.
This marks one of the most notable reductions in public debt ratios in recent years, signaling growing investor confidence and prudent expenditure management.
Boost in Gold Reserves and External Position
Ghana, Africa’s leading gold producer, has also benefited from a surge in global bullion prices.
The rise in gold revenues has strengthened the country’s foreign exchange reserves, which grew by 43%, reaching $10.7 billion at the end of August 2025.
The increase in reserves has provided the Bank of Ghana with a much-needed buffer to manage external payment obligations and stabilize the cedi.
It has also reassured the international market of the improving capacity to meet its financial commitments.
Economic Outlook
Economists believe the Moody’s upgrade could further enhance Ghana’s credibility on global financial markets and attract new investments.
The stable outlook suggests that the country’s current trajectory is sustainable, provided fiscal discipline continues.
“The upgrade is a vote of confidence in the economic management and recovery strategy,” said a senior economist at the University of Ghana.
“However, maintaining this progress will depend on the government’s ability to sustain reforms and avoid fiscal slippages, especially ahead of future elections.”
Background: From Default to Recovery
The road to recovery has been arduous. In 2022, the country defaulted on most of its external debt as inflation soared past 50% and the cedi lost nearly half its value against the US dollar.
The government was later compelled to seek assistance from the International Monetary Fund (IMF), securing a $3 billion bailout package in 2023.
The IMF program demanded strict austerity, improved revenue mobilization, and enhanced public financial management.
These reforms, though unpopular at first, have been pivotal in stabilizing the economy and regaining international confidence.
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