Standard and Poor’s (S&P) has upgraded Ghana’s sovereign credit ratings from CCC+/C to B-/B with a stable outlook. This mark the second positive revision within six months by the Global Ratings agency.
Improved fiscal discipline, stronger exports and recovery in foreign reserves were key factors considered by the agency. Rising gold and cocoa export volumes have bolstered the cedi’s stability and increased foreign reserves to nearly eleven billion dollars, up from 6.8 billion dollars in 2024.
The substantial reserve accumulation reflects improved balance of payments performance driven by favorable commodity prices and export expansion.
S&P stated: “The stable outlook balances the potential for stronger balance of payments performance and improvements in Ghana’s fiscal outcomes as a result of ongoing expenditure reforms against still high debt service costs, reform implementation risks, and Ghana’s sensitivity to terms of trade, such as gold and cocoa prices, which have been unusually favorable over the last year.”
The upgrade signals renewed confidence from global capital markets in Ghana’s macroeconomic recovery trajectory. Improved sovereign ratings may lower borrowing costs for government and facilitate better access to international capital markets. A more stable macroeconomic environment featuring lower inflation, a stronger currency and rising reserves improves predictability for business planning and investment decisions.
The agency projects potential for further ratings improvement within twelve to eighteen months if Ghana consistently sustains fiscal deficits at lower levels while reducing debt service costs and strengthening access to foreign financing. Continued external position strengthening, including additional foreign currency reserve accumulation, would support upward revisions.
S&P commended the government, which assumed power in January 2025, for instituting fiscal rules alongside enhancements to public financial management. “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,” the report noted.
The administration has mandated a 1.5 percent of Gross Domestic Product (GDP) primary surplus annually, targeting debt reduction to 45 percent of GDP by 2034. A proactive framework addresses future fiscal deviations, establishing mechanisms for correcting budgetary imbalances before they accumulate.
S&P revised its 2025 growth forecast upward to 6.0 percent from a previous estimate of 4.5 percent. Gross international reserves are expected to strengthen to 10.4 billion dollars, representing 9 percent of GDP by year’s end, compared with 6.8 billion dollars in 2024.
The current account recorded a surplus of 3.4 billion dollars during the first half of 2025, up from 1.68 billion dollars for full year 2024. S&P forecasts a current account surplus of 4.6 percent of GDP in 2025, representing the largest on record for Ghana.
Inflation is projected to remain below 10 percent in 2026 as monetary policy and exchange rate dynamics have stabilized. “We forecast Ghana’s inflation will remain under 10 percent from over 20 percent at the start of 2025, while the cedi has appreciated by about 30 percent compared with the United States dollar so far this year,” the agency concluded.
Authorities are finalizing restructuring of the remaining five billion dollars worth of official and commercial debt, constituting approximately 7 percent of total public debt. Disagreements persist with some creditors regarding their treatment in exchange negotiations, though resolution appears imminent.
S&P forecasts Ghana’s spending on debt interest payments will average 20 percent of government revenue through 2028, significantly lower than the 44 percent average recorded during the five years leading to default in 2022. The decline reflects successful completion of domestic debt exchange programmes and Eurobond restructuring completed in October 2024.
The ruling National Democratic Congress (NDC) won December 2024 elections with a 46 seat parliamentary majority, enabling the administration to advance its reform agenda. Policy remains anchored by a three billion dollar International Monetary Fund (IMF) Extended Credit Facility programme running until May 2026.
Despite improvements, Ghana’s rating remains constrained by weak institutional arrangements, elevated government debt levels and high debt service costs. The economy remains vulnerable to weather and external shocks due to reliance on agriculture, representing 20 percent of GDP, and gold exports, comprising over 60 percent of goods exports during the first half of 2025.
Finance Minister Cassiel Ato Forson has consistently emphasized that economic gains reflect prudent and coordinated policies rather than temporary improvements. He attributes sustained progress to robust fiscal planning and targeted policy actions aimed at restoring macroeconomic confidence.
This upgrade follows S&P’s May 9, 2025 decision to raise Ghana’s foreign currency issuer credit rating from Selective Default (SD) to CCC+. That earlier revision recognized progress in debt restructuring efforts and improved macroeconomic outlook following successful conclusion of key phases in the domestic debt exchange programme.
The consecutive upgrades demonstrate Ghana’s gradual rehabilitation in international credit markets after defaulting on external obligations in December 2022. The country’s economic trajectory continues attracting attention from investors seeking exposure to frontier markets demonstrating commitment to fiscal reforms and debt sustainability.
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