Moody’s Upgrades Ghana’s Credit Rating to Caa2 Following Debt Restructuring
Credit rating agency Moody’s has upgraded Ghana’s long-term local and foreign currency issuer ratings, reflecting the country’s progress in debt restructuring and fiscal consolidation efforts.
The local currency rating was upgraded to “Caa2” from “Caa3,” and the foreign currency rating moved to “Caa2” from “Ca.” The New York-based agency also revised the country’s outlook to “positive” from “stable.”
This upgrade comes after Ghana successfully completed an extensive external debt restructuring, alleviating significant financial pressures on the government.
Over 90% of bondholders approved a $13 billion debt overhaul, a major step in addressing the near $30 billion debt default experienced in 2022. Moody’s noted that this debt treatment has played a critical role in improving the country’s financial stability.
The rating agency emphasized that the “positive outlook reflects the potential for liquidity risk to ease,” supported by ongoing fiscal reforms under the International Monetary Fund’s (IMF) $3 billion Extended Credit Facility (ECF) program.
This development follows the recent agreement reached between the IMF staff and Ghana during the third review of the ECF program.
Moody’s periodic review of Ghana’s ratings, completed in July 2024, took into account the government’s continuing debt restructuring under the G20 common framework, initiated in December 2022.
The restructuring of local currency debt, excluding Treasury Bills, was finalized in 2023, while foreign currency debt restructuring progressed significantly after agreements in June 2024 on a Memorandum of Understanding and a bondholder deal in principle.
The upgrade marks a significant step forward for Ghana, signalling a potential recovery path from its fiscal challenges and debt distress.
