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 change comes in light of substantial debt treatment that has eased the government’s financial pressures.
Additionally, Moody’s has revised the country’s outlook from “stable” to “positive.” The agency noted that this positive outlook indicates potential improvements in liquidity risk, supported by ongoing fiscal consolidation efforts in collaboration with the International Monetary Fund (IMF).
Recently, the IMF and Ghana reached an agreement on the third review of the country’s $3 billion Economic Facility Credit (ECF) program, following a successful external debt restructuring.
More than 90% of Ghana’s bondholders approved a $13 billion debt overhaul, a crucial step toward resolving the country’s nearly $30 billion debt default in 2022.
In July 2024, Moody’s indicated plans to upgrade Ghana’s credit rating after the country’s Eurobond exchange. The New York-based firm highlighted that its review of Ghana’s ratings, including the long-term issuer ratings of Caa3 for local currency and Ca for foreign currency, reflects the government’s ongoing debt restructuring under the G20 common framework initiated in December 2022. It also noted that the restructuring of local currency debt, excluding Treasury Bills, was completed in 2023.
“The restructuring of foreign currency debt, which makes up nearly half of Ghana’s total debt, has made significant progress following announcements in June 2024 about a Memorandum of Understanding on official sector debt and an agreement in principle with bondholders.”
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