Ghana’s long-term local and foreign currency issuer ratings have been raised by international credit rating company Moody’s, which has moved them up to “Caa2” from prior levels of “Caa3” and “Ca.” Ghana’s situation has significantly improved as a result of the massive debt restructuring that has reduced the financial strain on the government.

Ghana’s outlook was also changed by Moody’s from “stable” to “positive,” indicating the potential for more reductions in liquidity risks.

In a statement released on Friday, Moody’s stated that the “positive outlook reflects the potential for liquidity risk to ease amid ongoing fiscal consolidation efforts supported by an IMF program.”
This occurs while Ghana, supported by an IMF credit program worth $3 billion, continues its attempts to reduce its budget.

A deal was reached by Ghanaian and IMF officials during their third program review last week. A $13 billion debt restructuring proposal was agreed by more than 90% of Ghana’s bondholders in October, which will aid in the nation’s recovery from its projected $30 billion debt default in 2022.

The restructuring is anticipated to provide $4.4 billion in cash flow assistance during the IMF program, which runs until 2026, and reduce Ghana’s debt by $4.7 billion.

Ghana’s statistics office reports that the country’s economy is showing signs of life, with growth reaching 6.9 percent in the second quarter of 2024—the highest level in five years.
Once the government begins making payments on its debt, Moody’s predicts that Ghana’s debt would continue to decline, albeit gradually.