Fitch Lifts Ghana’s Credit Rating to ‘B-’ with Stable Outlook, Marking Turn in Economic Fortunes

In a notable boost to investor confidence, Fitch Ratings has upgraded Ghana’s credit rating to ‘B-’ with a stable outlook, signaling cautious optimism after years of fiscal turbulence. The decision reflects progress in debt restructuring efforts and signs of macroeconomic stabilization following IMF-backed reforms. While challenges remain, the upgrade marks a symbolic turnaround for an economy that has weathered two decades of financial volatility

This marks a critical turning point in Ghana’s debt crisis narrative. After defaulting on both local and external bonds between late 2022 and early 2023, the country embarked on a bold and painful economic adjustment process. That included a historic domestic debt exchange in early 2023 and a landmark USD 13.1 billion Eurobond restructuring concluded in late 2024, a deal Fitch described as significantly reducing the risk of holdouts among commercial creditors. By early 2025, the government had also reached agreements on most of its official bilateral debt, with just a small portion left to finalize.

The June 2025 rating action restores Ghana to the same speculative grade it held prior to default, a notch above its post-default low, signaling cautious investor optimism. But while the rating upgrade recognizes progress, it also reflects lingering vulnerabilities. Ghana continues to grapple with elevated debt levels, a heavy interest burden, and narrow fiscal space. Fitch noted that although the 2024 election year led to some fiscal slippage, Ghana is now targeting a return to surplus, with primary fiscal balance expected to improve from a deficit of 3.9% to a 0.5% surplus in 2025, and nearly 1% by 2026.

Beyond fiscal indicators, Fitch acknowledged improvements in the external sector. Ghana’s current account has returned to surplus, and reserves have increased to USD 6.8 billion, a far cry from the pre-default era. The cedi has appreciated since April 2025, helping ease imported inflation and stabilizing investor expectations. Inflation, which peaked in 2022 and remained elevated through 2024, is now projected to decline to 15% in 2025 and 10% in 2026, supported by tight monetary policy and falling global commodity prices.

Public debt, once over 90% of GDP, is now projected to settle around 60% by 2026, reflecting strong nominal GDP growth, exchange rate gains, and successful restructuring efforts. Yet, despite these improvements, Fitch still sees risks. Ghana’s interest-to-revenue ratio, though down from its 2021 peak of 48%, remains high at 26%. Liquidity pressures could reemerge if fiscal discipline wavers or if global conditions tighten.

To fully appreciate the weight of this upgrade, it is important to view it against the historical arc of Fitch’s sovereign ratings for Ghana. Over the past two decades, Ghana has hovered in the speculative “B” range, swinging between periods of reform-driven optimism, such as the post-HIPC era and the 2011 oil boom, and repeated bouts of fiscal crisis, most notably in 2013 and again in 2022.

Early 2000s–2005: From B to B+.

In March 2005, Fitch upgraded Ghana’s long-term foreign‑currency IDR to ‘B+’ (Stable) from ‘B’. This upgrade reflected strong post‑HIPC debt relief effects and prudent macro policies. Fitch noted Ghana’s recently completed Heavily Indebted Poor Countries (HIPC) debt relief, stable growth through the 2004 election year, and fiscal reforms (e.g. deregulating fuel prices) as drivers of the upgrade. The agency highlighted that Ghana had for the first time “navigated an electoral cycle without compromising macroeconomic policy,” bolstering investor confidence. Fitch’s action in 2005 thus signaled Ghana’s improved solvency ratios and commitment to consolidation; it cautioned, however, that Ghana remained vulnerable to external shocks given its still‑high debt and export concentration.

2012–2013: Fiscal Slippage and Downgrades.

By early 2013, Ghana’s fiscal situation had worsened sharply: the deficit surged to ~12% of GDP in 2012 (well above targets) due to overspending on wages, subsidies and election‑year financing. In February 2013, Fitch revised Ghana’s outlook to Negative (keeping the ‘B+’ IDR) citing a “severe deterioration” in the fiscal balance to 12.1% of GDP. Fitch saw this as evidence of “serious loss of fiscal control” and fading policy credibility. By October 17, 2013, Fitch downgraded Ghana’s IDR to ‘B’ (Stable outlook).

Fitch explained that the government had “failed to fully implement its fiscal consolidation plan”, accumulating new arrears and breaching deficit targets, thus weakening Ghana’s creditworthiness. (Reuters reported Fitch calling Ghana “one of Africa’s brightest prospects,” but warned that high deficits and debt had “weakened creditworthiness,” prompting the cut into B-rated “speculative” territory.) Fitch emphasized that Ghana’s public debt was rising (debt/GDP jumped in 2012) and that the new administration would need to halve the deficit by 2015 to restore confidence. Politically, this period saw a transition to President Mahama’s government (elected Dec 2012), which began adopting austerity measures in early 2013.

2014–2019: Stabilization at ‘B’.

From 2014 through 2019, Ghana’s sovereign IDR remained at ‘B’ (speculative grade). Fiscal consolidation under IMF-backed reforms gradually improved deficits (falling towards single digits by 2015–16) and moderate growth resumed. Notably, in September 2017 Fitch affirmed Ghana at ‘B’ (Stable). Fitch cited Ghana’s favorable medium-term growth prospects (5–8% GDP growth expectations, driven by oil and improved power supply) and moderating inflation, which allowed the central bank to loosen policy.

In 2017 the outlook was kept Stable, reflecting confidence that recent reforms (including capping the fiscal deficit) would continue to support debt dynamics. Throughout this era, political stability (successful 2016 elections) and robust commodity prices (gold, cocoa, oil) underpinned gradual improvement, though Fitch remained concerned that public debt (in the 60–70% GDP range) was high for a ‘B’ rating.

2020–2021: Pandemic Shock and Rising Risk.

The COVID-19 pandemic hit Ghana’s economy in 2020. Fitch affirmed Ghana’s ‘B’ IDR (Stable) in October 2020, noting that the economy showed a “gradual recovery” from the downturn and that external financing was ample. The agency highlighted that Ghana raised $3.0 billion via a Eurobond and would receive IMF/World Bank budget support, helping cover a large 2020 financing gap. Despite forecasting a modest 2020 GDP contraction (~–3.2%), Fitch saw resilience in agriculture and domestic demand. It cautioned, however, that the fiscal deficit would widen (projecting ~10–11% of GDP in 2020) due to COVID spending and warned of a higher debt trajectory (debt/GDP rising above 70%) if reforms faltered.

In June 2021, with the economy still recovering but deficits and debt elevated, Fitch revised the outlook to Negative (while maintaining ‘B’). High government spending to address COVID-19 and delayed fiscal consolidation had worsened metrics. By late 2021 Ghana’s debt and interest burdens had soared: debt stock rose from ~61% of GDP in 2019 to 79.7% by end-2021, and debt service consumed over 80% of tax revenue. These pressures set the stage for the next downgrades.

January 2022: Downgrade to ‘B-‘ (Negative).

On Jan 22, 2022, Fitch downgraded Ghana’s LT FC IDR to ‘B-‘ (maintaining a Negative outlook). This was Fitch’s first ‘B-‘ rating for Ghana. The move reflected persistent fiscal stress and external pressures. Ghana had run very large deficits (around 9–11% of GDP in 2020–21) and inflation had surged (~12.6% by Jan 2022). Public debt reached ~80% of GDP and interest costs were crowding out other spending. In context, Fitch had warned in 2013 that deficits >9–12% were unsustainable; the situation in 2022 echoed those concerns.

The downgrade acknowledged Ghana’s ongoing economic crisis: growth slowed, and although 2021 elections had passed, the new government faced limited room to maneuver. Finance Minister Ofori-Atta publicly lamented the downgrades, noting them as “unfortunate,” while Ghana began announcing steep spending cuts to placate markets. Moody’s likewise cut Ghana in early 2022 (to Caa1), and S&P lowered Ghana to ‘CCC+’ (still in default classification) in May 2022, reflecting the deepening stress.

2022–2023: Default and “Restricted Default”.

By late 2022, Ghana had defaulted on much of its external debt. After exhausting reserves and market access, in December 2022 Ghana suspended foreign bond payments and sought IMF support. On Feb 21, 2023, after the grace period lapsed on a missed Eurobond coupon, Fitch lowered Ghana’s LT FC IDR to ‘Restricted Default (RD)’.

Fitch explained that Ghana had missed a $40.6 million coupon on a 2026 Eurobond (part of its debt standstill). This action reflected a formal default event though Ghana continued to negotiate with creditors. Simultaneously, Fitch had already marked Ghana’s local-currency IDR as ‘RD’ (Feb 14, 2023) due to payment suspensions on domestic bonds.

During this period Ghana undertook major debt restructurings. In Dec 2022–Jan 2023, Ghana completed a domestic debt exchange (reprofiling GH₵126 billion local bonds). Fitch noted this exchange would cut Ghana’s interest burden, roughly 1.6% of GDP in 2023, but it also slightly raised overall debt/GDP.

On Mar 22, 2023, after seeing payments resume on the new local bonds, Fitch upgraded Ghana’s LT LC IDR to ‘CCC’ from ‘RD’. The agency cited the domestic debt relief as providing immediate fiscal space (cutting interest outlays), even as Ghana still needed external creditor agreements. Fitch emphasized that over 65% of eligible local bondholders participated in the restructuring, and that Ghana was on track for an IMF board approval (contingent on creditor assurances). However, Fitch kept the FC IDR at RD pending completion of external deals.

Late 2023–2024: Restructuring and Rating Consolidation.

In October 2024, Ghana successfully completed an international bond exchange. Fifteen outstanding Eurobonds were swapped for five new bonds, cutting foreign debt by ~6% of GDP and eliminating $3.5 billion of debt service through 2026. In response, on Oct 17, 2024, Fitch upgraded Ghana’s LT LC IDR to ‘CCC+’ and assigned the new Eurobonds a ‘CCC+’ rating. Fitch lauded Ghana’s “increased confidence” in avoiding another default on local debt after the swap.

The agency projected Ghana’s debt ratio declining over 2023–26 (from ~77% to ~68% of GDP) as a result of the reforms. Notably, Fitch retained Ghana’s LT FC IDR at ‘RD’, since the country still had not finished restructuring all external debt. Fitch expected Ghana to complete the remaining external debt work (including bilateral Paris Club/China claims and remaining Eurobond holdouts) by early 2025.

June 2025 Upgrade: Back to ‘B-‘ (Stable).

On June 16, 2025, Fitch upgraded Ghana’s sovereign rating to ‘B-‘ (Stable) from RD. This marked Ghana’s exit from default status, reflecting near-completion of its debt restructurings. Fitch noted that Ghana had “normalized relations with a significant majority of its external commercial creditors”. In context, Ghana’s economy was recovering from the 2022 crisis: commodity exports (gold, cocoa, oil) had rebounded, and the new government had committed to fiscal consolidation. Finance Minister Forson announced steep spending cuts for 2025, and IMF support (a $3bn Extended Credit Facility) was in place.

Fitch observed that Ghana had resolved its local debt burden and was on track to finish external debt exchanges by end-2025. The Stable outlook reflects Fitch’s view that, while still speculative, Ghana’s credit trajectory is now on a firmer footing compared to 2022.

Table 1. Fitch Ratings – Ghana Sovereign (Long-Term FC IDR, 2005–2025)

Each action above was taken against a backdrop of Ghana’s shifting economic landscape – from the HIPC‑driven stability of the mid-2000s, through the 2012–13 fiscal crisis, to the more recent debt crisis and recovery. The June 2025 upgrade to ‘B–’ (Stable) places Ghana’s rating one notch above its post‑default low. It signals that Ghana has climbed out of default territory, but also that considerable risks (high debt and interest burdens) remain as the country completes its fiscal consolidation.

In sum, Ghana’s long‑term Fitch rating trajectory has oscillated within the speculative (‘B’ and below) range for two decades, with periods of modest improvement (up to B+) followed by setbacks (downgrades to B and eventually B–/RD) driven by fiscal imbalances and external shocks. The current upgrade reflects a turning point in that trajectory, as external debt relief and tighter fiscal policy are embedding Ghana’s return to a sustainable debt path.

Last Updated on June 18, 2025 by Senel Media