Credit rating agency Moody’s has upgraded Ghana’s long-term local and foreign currency issuer ratings to “Caa2” from “Caa3” and “Ca,” respectively.
This is due to the extensive debt treatment that has significantly alleviated the government’s financial burdens.
The US-based firm also revised the country’s outlook to “positive” from “stable.”
In a statement, it alluded that the “positive outlook reflects the potential for liquidity risk to ease amid ongoing fiscal consolidation efforts supported by the International Monetary Fund”.
Last week, the International Monetary Fund staff and Ghana reached an agreement on their third review of the country’s $3 billion Economic Facility Credit (ECF) programme.
This follows a successful external debt restructuring.
Over 90% of Ghana’s bondholders approved a $13 billion debt overhaul, paving the way to emerge from its near $30 billion debt default in 2022.
Moody’s in July 2024 indicated to upgrade Ghana’s credit rating following the country’s Eurobond exchange.
The New York-based firm, in a statement, pointed out that it has completed a periodic review of Ghana’s ratings, including its long-term issuer ratings of Caa3 for local currency and Ca for foreign currency.
These ratings, it said, reflect the government’s ongoing debt restructuring under the G20 common framework initiated in December 2022.
It further said that the restructuring of local currency debt, excluding Treasury Bills, was completed in 2023.
“The restructuring of foreign currency debt, which constitutes nearly half of Ghana’s total debt, has progressed significantly following announcements in June 2024 regarding a Memorandum of Understanding on official sector debt and an agreement in principle with bondholders”.
