Fitch Ratings has upgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B’ from ‘B-’, with a Positive Outlook.
The rating agency, which cited stronger economic fundamentals and improved fiscal performance, disclosed this in its latest assessment of Ghana’s economy.
It said the upgrade reflected a broad-based improvement in macroeconomic conditions.
Fitch said the decision was driven by a sharp decline in public debt relative to Gross Domestic Product (GDP), supported by robust economic growth, fiscal consolidation measures and the appreciation of the Ghana cedi.
The agency noted that Ghana had made significant progress in restoring macroeconomic stability following recent economic challenges, supported by improved public financial management and disciplined fiscal policies.
Fitch stated that the Positive Outlook reflected expectations that Ghana would continue to implement prudent economic policies and sustain improvements in key macroeconomic indicators.
It said ongoing reforms and strengthened fiscal discipline were expected to support further normalisation of economic conditions, including declining inflation and improved external balances.
The report highlighted the improved investor confidence that Ghana’s fiscal consolidation efforts had contributed to, in addition to reduced vulnerabilities in public finances.
It added that enhanced revenue mobilisation and controlled government spending had helped the country to achieve primary fiscal surpluses, strengthening its fiscal position.
Fitch also indicated that the appreciation of the cedi had played a significant role in reducing the debt burden, improving the country’s overall credit profile.
The agency pointed out that Ghana’s international reserves position had been strengthened considerably, contributing to reduced external liquidity risks.
It noted that sustained inflows from exports, foreign direct investment and multilateral support had supported the build-up of reserves.
Fitch further observed that Ghana’s economic growth prospects remained strong, supported by key sectors such as mining and services.
The agency projected that real GDP growth would remain robust over the medium term, contributing to improved fiscal and external balances.
Despite the positive outlook, Fitch emphasised the need for continued policy discipline to sustain the gains achieved.
It identified potential risks, including external shocks and fluctuations in global commodity prices, which could affect the country’s economic outlook.
The agency indicated that maintaining fiscal prudence and strengthening institutional frameworks would be essential to securing further rating improvements.
The upgrade marks a significant milestone in Ghana’s ongoing economic recovery and reflects renewed confidence in the country’s macroeconomic management.
Source: GNA
