Fiscal reforms, economic recovery push Ghana’s rating to 5-year high

Fitch Ratings upgraded Ghana’s sovereign credit rating on Friday on the back of improving fiscal management and stronger foreign reserves, despite growing risks from the Middle East conflict that could threaten the country’s economic recovery.

BusinessDay analysis showed the latest upgrade marks the West African nation’s highest credit rating level since June 2021. The ratings agency raised its long-term foreign-currency issuer default rating to B from B-, with a Positive Outlook. The country is currently rated B- by S&P Global Ratings and Caa1 by Moody’s Ratings.

“The upgrade reflects a sharp fall in public debt-to-GDP, supported by robust real GDP growth, substantial fiscal consolidation efforts and currency appreciation, as well as a marked increase in international reserves that lowers external liquidity risks,” Fitch said in a statement.

It added that the positive outlook reflects expectations of “continued fiscal prudence underpinned by improved public financial management, further normalisation of macroeconomic conditions evidenced by an expected decline in average inflation, and a further building of external buffers.”

The upgrade represents another milestone in Ghana’s gradual rebound from years of economic distress triggered by soaring debt levels, high inflation and persistent currency volatility.

The move follows similar rating actions by Moody’s Ratings and S&P Global Ratings, both of which recently cited Ghana’s improving fiscal trajectory and economic resilience.

The economy of Africa’s top gold producer has shown sustained signs of recovery in recent months, with inflation slowing for 15 consecutive months before edging higher in April for the first time since December 2024.

Alhassan Iddrisu, the government statistician, noted last week that renewed pressure from global disruptions and regional supply shocks had begun pushing food and fuel prices higher, although the impact had yet to spread broadly across the economy.

Fitch expects Ghana’s public debt to decline to 46 percent of gross domestic product by 2027, while forecasting continued strong economic growth over the same period.

The gold-, oil- and cocoa-producing nation has been rebuilding investor confidence following one of its worst economic crises in decades, supported by tighter fiscal controls and improved macroeconomic management.

“Inflation slowed to 3.2 percent year-on-year in March 2026, its lowest level since 1999, helped by exchange-rate appreciation,” Fitch said. “Inflation marginally rose to 3.4 percent in April 2026, and we expect it will gradually increase by the end of the year as the pass-through effect from currency appreciation fades and higher oil prices feed into domestic prices.”

The agency said inflation is still expected to remain on a downward trend on an annual average basis through 2026 and 2027.

“We anticipate the Bank of Ghana will remain prudent and pause its easing cycle to prevent inflation risks from materialising, after a cumulative 1,400 basis points reduction in the monetary policy rate between July 2025 and March 2026 to 14 percent,” Fitch added.