Moody’s upgrades Ghana’s credit rating to B3, revises outlook to stable

Moody’s Ratings has upgraded Ghana’s long-term foreign and local currency issuer ratings to B3 from Caa1, while revising the country’s outlook to stable from positive.

In a statement issued from London on Friday, October 9, 2026, the rating agency also upgraded Ghana’s foreign currency senior unsecured debt ratings to B3 from Caa1.

The ratings for the country’s foreign and local currency senior unsecured medium-term note programmes were similarly raised to (P)B3 from (P)Caa1.

Moody’s attributed the upgrade to sustained improvements in domestic financing conditions, which have lowered borrowing costs and improved the government’s ability to service its debt, although debt affordability remains weak.

The agency said financing costs had remained relatively low despite external pressures from the conflict in the Middle East, supported by continued fiscal discipline, institutional improvements and favourable export prices.

It expects these gains to be sustained.
However, the B3 rating continues to reflect Ghana’s exposure to fluctuations in commodity prices and exchange rate depreciation, limited government revenue mobilisation and policy effectiveness that remains weak despite signs of improvement.

These risks are balanced by a more moderate debt burden, a history of financing support from multilateral creditors and Ghana’s record of political stability and relatively strong legislative and executive institutions.

Lower interest costs drive upgrade

Moody’s said the improvement in Ghana’s debt affordability was a major factor behind the rating decision, pointing to lower domestic financing costs, fiscal discipline and macroeconomic stability supported by favourable commodity prices.

Interest payments were 24 per cent below the budget target in the first half of 2026, accounting for 17.2 per cent of government revenue during the period. The agency described this as the lowest ratio since 2012 and a significant improvement in Ghana’s credit position.

It projected interest payments would average between 20 and 25 per cent of government revenue through 2028, compared with the 25 to 30 per cent range when Ghana’s rating was downgraded to Caa1 in October 2025.

The agency identified rising export prices as another important source of support, particularly the elevated price of gold.

Ghana, Africa’s largest gold producer, benefited from historically high gold prices, with the commodity accounting for 67 per cent of total goods exports in 2025.

Moody’s also noted that Ghana’s current account had remained in surplus since 2024, marking a significant shift from more than two decades of persistent deficits.

Lower domestic financing costs have been supported by easing inflationary pressures and an appreciation of the cedi. Although inflation remained below the Bank of Ghana’s target range, the conflict in the Middle East contributed to a pause in the central bank’s monetary easing cycle.

Inflation reached a low of 3.2 per cent in March 2026 before rising to 5.2 per cent in September.

Fiscal consolidation reduces debt burden

The rating agency said the government’s spending restraint, particularly on capital expenditure, had helped strengthen public finances.

Ghana recorded a primary surplus of more than 2 per cent of gross domestic product (GDP) in 2025, representing a sharp improvement from a primary deficit of 2.1 per cent of GDP in 2024.

Under Moody’s definition, government debt includes obligations associated with the Ghana Cocoa Board, domestic arrears owed to suppliers and publicly guaranteed debt.

Using this measure, the country’s debt burden declined to 48.8 per cent of GDP in 2025 from 70.1 per cent in 2024, reflecting currency appreciation and fiscal consolidation.

Moody’s expects fiscal discipline to continue under the 36-month International Monetary Fund (IMF) Policy Coordination Instrument, which is intended to sustain reform momentum and investor confidence following the completion of Ghana’s Extended Credit Facility programme in July.

The agency noted that the Policy Coordination Instrument is not funded.

Stable outlook reflects balanced risks

Moody’s said the stable outlook reflected a balance of risks at the B3 rating level, with expectations that Ghana would sustain its macroeconomic stability and reduced government liquidity pressures.

These improvements are expected to be supported by generally favourable external conditions and emerging institutional reforms.

The agency projected government debt under its definition to remain around 50 per cent of GDP over the next several years. Interest payments are also expected to stabilise at between 20 and 25 per cent of government revenue, below the levels recorded during the decade preceding the debt restructuring.

On the upside, Moody’s said a longer record of fiscal discipline and continued improvement in external buffers could strengthen Ghana’s ability to withstand fluctuations in commodity prices and other external shocks.

It cited the Ghana Accelerated National Reserve Accumulation Policy, which seeks to increase the country’s international reserves but relies mainly on domestic gold purchases.

However, the agency warned that Ghana remained vulnerable to exchange rate movements, commodity price volatility and substantial fiscal risks.

A sharp fall in gold prices could weaken the country’s terms of trade, reduce foreign exchange inflows, place pressure on the cedi and push inflation higher.

Other risks include the weak financial performance of state-owned enterprises, the legal requirement for the government to recapitalise the Bank of Ghana’s negative net equity position by 2032, and a history of fiscal slippages during election cycles.

ESG weaknesses remain a concern

Moody’s said Ghana’s environmental, social and governance (ESG) risk profile continued to weigh on its credit rating, leaving the country with a lower rating than it might otherwise have achieved without these exposures.

The agency attributed this mainly to a weak, although improving, record of policy effectiveness, combined with low wealth levels and limited fiscal space that constrain the country’s ability to withstand adverse social and environmental developments.

Ghana’s environmental risk profile reflects its vulnerability to weather-related disruptions and climate change, particularly because of the importance of agriculture to the economy.

Social risks stem from limited access to quality housing and education, especially in rural communities.

On governance, Moody’s cited weaknesses in policy effectiveness, challenges in domestic revenue mobilisation, episodes of high inflation and a history of fiscal slippages and arrears accumulation during election periods.

The agency also revised Ghana’s country ceilings, raising the local currency ceiling to Ba3 from B1 and the foreign currency ceiling to B1 from B2.