Ghana’s economic recovery has gained fresh international recognition after Fitch Ratings upgraded the country’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B’ from ‘B-’, citing sharp improvements in debt levels, inflation and external buffers.
The global ratings agency assigned a Positive Outlook, signalling confidence that ongoing fiscal discipline and macroeconomic stability could support further upgrades if momentum is sustained.
Fitch said the upgrade was driven largely by a rapid decline in Ghana’s public debt-to-GDP ratio, supported by robust economic growth, currency appreciation and sustained fiscal consolidation.
Public debt is now projected to fall to 46 percent of GDP by 2027, below the ‘B’ category median of 51 percent, continuing a steep decline that began in 2025.
The agency noted that improved fiscal management and continued primary surpluses will underpin the downward trajectory, alongside steady GDP growth and easing borrowing costs.
Ghana’s external position has also strengthened significantly, with Fitch highlighting rising international reserves and sustained current account surpluses.
Reserves are expected to climb to 4.8 months of external payments by 2027, well above the benchmark for similarly rated economies. This follows a strong build-up in 2025, when reserves rose by US$5.4 billion to US$12.3 billion.
The improvement is being driven by high gold export earnings, foreign direct investment inflows and multilateral support, alongside measures such as the formalisation of small-scale mining.
Fitch expects Ghana to maintain a current account surplus through 2027, even as it narrows from the record 8.2 percent of GDP recorded in 2025.
Inflation has fallen sharply, reinforcing macroeconomic stability. Headline inflation dropped to 3.2 percent in March 2026, its lowest level in over two decades, before inching up slightly to 3.4 percent in April.
Fitch expects inflation to remain on a generally declining trend over the next two years, although some upward pressure could emerge due to global oil prices and fading currency effects.
The Bank of Ghana has already responded by cutting its policy rate by a cumulative 1,400 basis points between mid-2025 and March 2026, bringing it to 14 percent.
Fitch projects Ghana will maintain a primary fiscal surplus of 1.5 percent of GDP in 2026 and 2027, following a record 2.9 percent in 2025.
The agency said improvements in public financial management reduce the risk of fiscal slippages, even as the government introduces temporary measures—such as reducing fuel-related taxes—to cushion consumers against high global oil prices.
However, it warned that interest costs remain elevated, with the interest-to-revenue ratio expected to hover around 20 percent, well above the peer median.
While debt service obligations are set to rise, Fitch views Ghana’s position as manageable due to strong reserves and improved liquidity.
Debt servicing costs are forecast to increase to 6.8 percent of GDP by 2027, up from 4.6 percent in 2025, partly due to Eurobond amortisation and domestic debt exchange programme repayments.
Still, the agency believes Ghana will meet these obligations comfortably and may even buy back some domestic bonds early after reopening its bond market in April 2026.
Fitch expects Ghana’s economy to remain resilient, projecting average real GDP growth of 5 percent through 2027.
Growth will be supported by strong gold production, improved consumer confidence, lower inflation and a less restrictive fiscal stance.
Despite the positive outlook, Fitch cautioned that risks remain. A reversal in fiscal discipline, rising debt servicing costs or weaker external buffers could lead to a downgrade.
Conversely, sustained fiscal prudence, continued reserve accumulation and further reduction in debt could pave the way for another upgrade.
On governance, Ghana maintains a mid-range ranking globally, supported by peaceful political transitions and moderate institutional strength, though challenges remain in areas such as corruption control.
The upgrade marks a significant milestone in Ghana’s post-debt restructuring recovery, reinforcing investor confidence as the country rebuilds macroeconomic stability following recent financial shocks.
By: Christian Akorlie / businesspostonline
