S&P Forecasts Ghana’s Debt-to-GDP Ratio to Remain Above 60% Until 2027
Global rating agency S&P has projected that Ghana’s public debt-to-Gross Domestic Product (GDP) ratio, including COCOBOD obligations, will remain above 60% in gross terms until 2027.
The New York-based agency emphasized that Ghana’s debt trajectory will be highly sensitive to economic growth, fiscal performance, and balance-of-payments dynamics, particularly those extending beyond the June 2026 end date of the country’s International Monetary Fund (IMF) programme.
Debt Composition and Fiscal Risks
S&P estimates that after Ghana’s debt exchange programme, foreign currency debt constitutes approximately 66% of the total government debt, assuming a 99% participation rate in the Eurobond exchange, with 91% of holders opting for discount notes.
The agency cautioned that it might revise Ghana’s local currency ratings outlook to negative if fiscal and external economic outcomes deteriorate further.
Opportunities for Ratings Upgrade
On a more positive note, S&P noted that a successful restructuring of Ghana’s remaining commercial debt could lead to an upgrade of the long-term foreign currency rating.
“Our analysis will incorporate the sovereign’s post-restructuring credit factors, including the new terms and conditions of its external debt,” S&P stated.
The rating agency also indicated that Ghana could see an improvement in local currency ratings if the government makes significant progress in stabilizing public finances and bolstering foreign currency reserves.
Debt Exchange and Ratings Update
Following the completion of Ghana’s distressed debt exchange on Eurobonds, S&P assigned a ‘CCC+’ foreign currency issue rating to the country’s five categories of new notes.
The exchange, which secured the approval of the majority of Ghana’s Eurobond holders, aimed to restructure $13.1 billion in Eurobond debt and arrears. The debt exchange sought to alleviate external debt-service pressures and restore public debt sustainability as part of Ghana’s Extended Credit Facility (ECF) arrangement with the IMF.
