Ghana’s credit rating upgraded to CCC+ by S&P amid debt restructuring progress

The decision reflects Ghana’s recent progress in restructuring its outstanding commercial debt, particularly following the country’s successful Eurobond exchange programme in October 2024.

In its latest update, the United States-based ratings agency stated that the outlook for both Ghana’s foreign and local currency ratings remains stable. Additionally, the assessment of transferability and convertibility is also held at CCC+.

According to S&P, Ghana is nearing the final stages of negotiations to restructure debts owed to external lenders, including commercial banks. These efforts are a continuation of the government’s broader strategy to reduce its unsustainable debt levels and restore macroeconomic stability.

S&P noted: “Ghana has taken recent steps to restructure remaining commercial debt,” adding that these moves mark a significant milestone in its post-default recovery path.

The agency pointed to Ghana’s “supportive economic growth, ongoing fiscal reforms, and improved external position” as crucial factors that balance out ongoing challenges such as high debt servicing obligations and fiscal slippages typically seen during election years.

Ghana has experienced improvements in its external financial metrics, including a boost in foreign exchange reserves and stronger gold export revenues. Inflation, which currently stands at 21.2%, is on a downward trend, aided by a firming of the Ghanaian cedi and falling global energy prices.

Despite the positive trajectory, S&P issued a cautionary note about the country’s long-term debt sustainability. It highlighted that external debt comprises 62% of total government liabilities, which is equivalent to around 49% of Ghana’s Gross Domestic Product (GDP).

S&P warned that the nation’s fiscal health remains “highly vulnerable to exchange rate volatility and fluctuations in global commodity prices.”

Persistent challenges remain

Ghana continues to grapple with structural issues such as ineffective tax collection, periodic overspending—particularly around elections—and a high cost of servicing debt. These factors, while not derailing the recent credit rating upgrade, still pose significant risks to economic stability.