Moody’s Upgrades Ghana’s Credit Rating to B3

Moody’s Ratings has upgraded the Government of Ghana’s long-term foreign currency and local currency issuer ratings to B3 from Caa1 and changed the outlook to stable from positive.

In a statement issued from London on Friday, October 9, 2026, the rating agency said it had also upgraded Ghana’s foreign currency senior unsecured debt ratings to B3 from Caa1 and the foreign and local currency senior unsecured medium-term note programme ratings to (P)B3 from (P)Caa1.

The upgrade reflects a sustained easing in Ghana’s domestic financing conditions that has led to a reduction in financing costs and a meaningful improvement in debt affordability, albeit from a weak level.

Moody’s said financing costs had remained lower despite external headwinds from the Middle East conflict, reflecting continued fiscal discipline underpinned by institutional improvements, and favourable export prices that support macroeconomic stability. It said it expected these improvements to last.

At the B3 level, the rating incorporates credit constraints including high susceptibility to terms-of-trade volatility and exchange rate depreciation, relatively low government revenue generation that constrains the flexibility of fiscal policy, and weak but improving policy effectiveness.

These are balanced by credit strengths including a more moderate debt burden, a track record of financing support from multilateral creditors, and a track record of political stability and the relative strength of legislative and executive institutions.

Rationale
Moody’s said the upgrade captured the improvement in Ghana’s debt affordability as a result of a sustained easing in domestic financing conditions supported by fiscal discipline and macroeconomic stability on the back of favourable commodity prices.

Interest payments were 24 per cent below the budget target in the first half of 2026 and amounted to 17.2 per cent of government revenue for that period, the lowest ratio since 2012 and a material credit improvement.

The agency projected interest payments to average around 20 to 25 per cent of revenue through to 2028, down from 25 to 30 per cent at the time of the upgrade to Caa1 in October 2025.

A key underlying credit support, it said, had been an increase in the price of Ghana’s exports, which it expected to be sustained.

As Africa’s largest gold producer, Ghana is a beneficiary of historically elevated prices for the commodity, with gold accounting for 67 per cent of total goods exports in 2025. The current account has been in surplus since 2024, a marked change following more than two decades of persistent deficits.

Lower domestic financing costs reflect an easing of inflationary pressures, aided by exchange rate appreciation.

Inflation remained contained below the Bank of Ghana’s target range, although the Middle East conflict contributed to a pause in the Bank’s easing cycle. Inflation reached a trough of 3.2 per cent in March 2026 before rising to 5.2 per cent in September.

Continued fiscal discipline also supported the improvement in funding costs. Restrained government spending, particularly on capital expenditure, supported a primary surplus outturn of more than two per cent of GDP in 2025, a sharp turnaround compared with the primary deficit of 2.1 per cent of GDP in 2024.

The government debt burden, which under Moody’s perimeter includes the Ghana Cocoa Board, domestic arrears to suppliers and publicly guaranteed debt, has fallen to 48.8 per cent of GDP in 2025 from 70.1 per cent in 2024, reflecting currency appreciation and fiscal consolidation.

Moody’s said it expected fiscal discipline to continue under a non-funded 36-month International Monetary Fund Policy Coordination Instrument agreed to anchor reform momentum and investor confidence following the completion of the Extended Credit Facility programme in July.

Stable Outlook
The stable outlook captures balanced risks at the B3 level. Moody’s said it expected Ghana’s macroeconomic stability and reduced government liquidity risk to be sustained, underpinned by generally favourable external dynamics as well as emerging institutional improvements.

It projected government debt under its definition to remain stable at around 50 per cent of GDP over the next several years, and expected government interest payments to stabilise at around 20 to 25 per cent of government revenue, lower than during the decade leading to the debt restructuring.

On the upside, a lengthening track record of fiscal discipline and sustained progress in improving external buffers could improve resilience to terms-of-trade volatility.

The government’s Ghana Accelerated National Reserve Accumulation Policy targets increasing total international reserves but relies mainly on domestic gold purchases.

Downside risks stem mainly from high susceptibility to exchange rate and commodity price volatility and sizeable fiscal risks. In particular, a large drop in gold prices would weigh on terms of trade, reduce foreign exchange inflows and likely lead to exchange rate pressures and higher inflation.

Fiscal risks stem from the weak financial performance of state-owned enterprises, the legal requirement to recapitalise the Bank of Ghana’s negative net equity position by 2032, and a track record of fiscal slippages during electoral cycles.

ESG Considerations
Moody’s said Ghana’s ESG Credit Impact Score indicated the credit rating is lower than it would have been if ESG risk exposures were not present.

This primarily reflects a weak, albeit improving, track record of policy effectiveness, which, together with low wealth and constrained fiscal space, limits resilience to adverse social and environmental trends.

Ghana’s environmental issuer profile score reflects the exposure of the economy to weather-related disruptions and the effects of climate change, given the high importance of the agriculture sector.

Its social issuer profile score is driven by limited access to quality housing and education, especially in rural areas. The governance issuer profile score reflects weaknesses in policy effectiveness, underscored by challenges to domestic revenue mobilisation, episodes of high inflation and a track record of fiscal slippage and arrears accumulation during election cycles.

Ghana’s country ceilings were also adjusted, with the local currency country ceiling raised to Ba3 from B1 and the foreign currency country ceiling to B1 from B2.

Source: Graphic

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