The Credit Ratings Agencies (CRAs) licensed by the Securities and Exchange Commission (SEC) are now gearing up to commence providing independent credit ratings for corporate bonds, green bonds and commercial papers that will be issued for public investment on Ghana’s capital market. This follows moves by the capital markets regulator – supported by the Ghana Stock Exchange itself – to fully implement its Securities Industry (Credit Ratings Agencies) Guidelines 2021 and the Green Bonds Guidelines 2024.
SEC is moving towards making credit ratings a strict requirement to enhance market transparency and investor protection and has signaled that ratings will be required for public debt offers. While the transition period has allowed existing firms time to comply, the SEC now expects all new public debt issuances to include an independent credit rating.
To this end Agusto & Co. (Ghana) which is specifically licensed to rate commercial papers, is actively preparing new issuances for the Ghana Stock Exchange (GSE). The other ratings firm licensed by SEC, Beacon Ratings, has reported ongoing rating activities for major entities including First Atlantic Bank, Ghana Oil Limited (GOIL), and First Bank Ghana, having rated DCI Microfinance back in February 2023 for debt sourcing purposes.
However debt securities issued directly by the Government of Ghana currently do not require SEC approval or mandatory ratings from locally licensed agencies before issuance. Government’s bonds are customarily rated by the international ratings agencies – Fitch, Standard and Poors and Moodys – in line with their sovereign rating of the country itself.
These international ratings agencies, including Global Credit Ratings – the arm of Moody’s that rates African corporates – however rate several Ghanaian companies, particularly financial institutions such as Ecobank Ghana, Fidelity Bank, Enterprise Insurance, SIC Insurance, Star Assurance and Letshego Savings and Loans among others. Instructively though, a few years ago, a couple of banks in Ghana withdrew from being rated by Fitch and Standard & Poors on the grounds that those agencies were indiscriminately assigning them with the same poor ratings they were giving to the country in the midst of a macroeconomic crisis, without considering their peculiar institutional circumstances.
Under SEC Ghana regulations, credit ratings are defined as an opinion on creditworthiness using an established and defined ranking system. While agencies can use their specific models, they generally follow a standard scale from AAA (highest creditworthiness/lowest risk) to D (default).
Locally licensed agencies often use “National Scale” ratings (e.g., BBB-(GH)) to provide a localized risk assessment compared to other domestic peers.
Ratings must distinguish between “Investment Grade” (high safety) and “Speculative/Junk Grade” (higher risk) to help investors in Ghana make informed choices.
To maintain a license, CRAs must adhere to strict operational and ethical standards. Agencies are strictly prohibited from advising issuers on how to structure products to get a better rating. They must maintain total independence from the entities they rate.
CRAs must file annual and semi-annual reports with the SEC, detailing all ratings on “watch,” transitions, and any rating actions taken during the period. At least two-thirds of the directors must be resident in Ghana. Furthermore, at least half of the board and all members of the Rating Committee must have relevant financial market experience.
Agencies are required to publicly disclose their rating methodologies, assumptions, and any sensitivity analyses performed to support their conclusions. Once a security is rated, the CRA must continuously monitor the issuer and promptly update the rating if there are significant changes in their financial condition
While several entities and debt instruments have undergone the rating process in Ghana, the use of locally licensed agencies is currently in a transition phase from voluntary to mandatory
From guidelines to implementation
What is now changing is the transition from framework to enforcement. The objective is to ensure that investors—particularly pension funds and insurance companies—have standardized, independent assessments of credit risk.
One senior SEC official asserts that “Credit ratings are not just an optional add-on; they are a critical pillar for transparency and market discipline. Our goal is to make ratings an integral part of securities issuance in Ghana.”
The GSE is also playing a complementary role by integrating ratings into its listing and disclosure requirements. GSE executives explain that the exchange is working on embedding ratings into listing rules for debt securities, so that investors can easily benchmark risk across issuers.
The revival of Ghana’s domestic bond market following the 2023–2024 debt restructuring has created fresh opportunities for rated issuances. Ghana returned to the domestic bond market in 2026 with a seven-year bond issuance after a prolonged hiatus, signaling renewed investor appetite.
Market analysts expect that new corporate bond issuances—particularly by banks and large listed firms—will increasingly carry ratings as the SEC tightens enforcement. “The next wave of bond issues will likely be rated,” predicts a fixed income strategist at a leading investment bank. “It will become a de facto requirement even before it becomes a legal one.”
The response from market participants has been broadly positive, albeit cautious. Institutional investors, especially pension funds, have welcomed the move as a tool for better risk assessment.
A fund manager at a major pension trustee firm enthuses: “Ratings will help standardize how we evaluate credit risk across instruments. It improves comparability and supports more disciplined portfolio construction.”
However, some issuers have raised concerns about cost and potential rating outcomes. Smaller corporates, in particular, worry that obtaining and maintaining a rating could be expensive and may expose weaker credit profiles, while they claim to support transparency, they fret that the cost of obtaining a rating and the risk of being assigned a low rating are real considerations.
Regulators acknowledge these concerns but argue that the long-term benefits outweigh the short-term costs. According to the SEC, rated issuances are likely to enjoy lower borrowing costs over time due to improved investor confidence and reduced information asymmetry.
Building market discipline
Beyond individual issuances, the introduction of ratings is expected to have broader systemic benefits. Credit ratings can help enforce market discipline by signaling credit deterioration early, thereby prompting corrective action by issuers and more informed decision-making by investors.
They also play a critical role in pricing risk. In mature markets, ratings are integral to determining yield spreads between different classes of debt. Ghana’s market, by contrast, has historically relied more on general market sentiment and government benchmarks.
“Ratings will bring more scientific pricing into the market,” says an economist at a policy think tank in Accra. “They will help differentiate between high-quality and lower-quality issuers in a way that the market currently struggles to do.”
While the direction of policy is clear, full implementation will be phased. Market insiders indicate that the SEC is likely to begin with mandatory ratings for public debt securities—particularly corporate bonds—before extending the requirement to collective investment schemes.
The SEC is expected to issue detailed directives to formalize these timelines, building on its existing guidelines and recent regulatory updates across the capital market.
By: Toma Imirhe / businesspostonline
