Economist cautions against borrowing despite Fitch upgrade

An economist and Senior Lecturer at the University of Ghana Business School, Professor Patrick Asuming, has cautioned that Fitch Ratings’ recent upgrade of Ghana’s credit status to ‘B-’ with a stable outlook should not be interpreted as a green light for re-entering international capital markets.

He argued that despite the improved rating, Ghana remains constrained by its participation in the International Monetary Fund (IMF) program and unresolved structural fiscal challenges.

 “You cannot enter the capital market as long as we are in the IMF program. We will not enter the capital market even if our credit rating goes up to AA. That is what we are signed on to,” Professor Asuming stated in an interview.

The Fitch upgrade has sparked optimism in financial circles, suggesting improving macroeconomic fundamentals.

However, Professor Asuming believes that any premature return to the Eurobond market could risk undermining recent fiscal gains and plunge the economy back into unsustainable debt.

“In my view, we should not even be thinking of re-entering the market issuing new Eurobonds. The Eurobonds and this extensive external borrowing have been extremely problematic for the Ghanaian economy,” he noted.

Ghana has made strides in stabilizing its finances during 2025 under the current administration and in alignment with IMF recommendations. Yet, Professor Asuming insists that long-term sustainability will depend on more fundamental reforms.

“We still have problems in the economy to fix. What we’ve done so far in 2025 is try to put government finances back in some order, but even with that, we are not completely out of the woods. The sustainable tax reforms that will bring in revenue on a consistent basis, we haven’t done that yet,” Professor Asuming explained.

Finance Minister Dr. Cassiel Ato Forson has nonetheless described the Fitch upgrade as a significant achievement in Ghana’s ongoing recovery journey.

“This is a significant milestone. It reflects government’s unwavering resolve to fully revive the economy and deliver lasting relief and shared prosperity for Ghanaians,” Dr. Forson noted in a statement.

Governor of the Bank of Ghana, Dr. Johnson Asiama, also expressed confidence in the country’s trajectory, stating that the rating reflects Ghana’s improving external sector performance, robust monetary policy, and regulatory reforms.

Speaking at the ‘Banking the Last Mile’ forum hosted by Absa Bank Ghana and the Ghana Association of Banks, Dr. Asiama described the outlook as a “clear indication of Ghana’s improving macroeconomic fundamentals and external sector performance.”

Ghana’s Eurobonds have witnessed modest price gains since the rating announcement, buoyed by improved investor sentiment.

However, with debt restructuring discussions still underway under the G20 Common Framework, analysts have echoed Professor Asuming’s caution.

“Rating upgrades are welcome but rebuilding trust and stability must come bond by bond, not by rushing back into unsustainable borrowing,” Professor Asuming advised.