Ghana’s Credit Outlook Faces Downside Risks — S&P
By Nii Trebi Hammond
S&P Global Ratings has warned that Ghana’s sovereign credit outlook could come under renewed pressure over the next 12 to 18 months if fiscal reforms lose momentum or external conditions deteriorate.
In its latest assessment, the agency indicated that any slowdown in fiscal consolidation, manifesting in wider budget deficits or rising debt servicing costs, could weaken government’s ability to refinance maturing obligations and sustain macroeconomic stability.
“It could lower our rating on Ghana over the next 12–18 months if fiscal reform momentum stalled, materially raising fiscal deficits or debt service costs, while straining the government’s ability to refinance maturing debt as it comes due,” S&P stated.
Beyond fiscal risks, the agency highlighted vulnerabilities in the external sector. It cautioned that adverse developments such as weaker terms of trade or declining export volumes could further weigh on Ghana’s credit profile, particularly given the economy’s reliance on commodity exports.
S&P also drew attention to uncertainties surrounding the country’s ongoing debt restructuring programme. It noted that while substantial progress has been made, the process still faces potential delays, especially in relation to negotiations under the G20 Common Framework, where disagreements among creditors could emerge.
“Although not our base case, we could also consider a negative rating action if the remaining part of debt restructuring stalls,” it added, citing potential disputes over comparability of treatment among creditor groups.
Despite these downside risks, the agency acknowledged the possibility of an improved outlook should current reform efforts be sustained. Continued fiscal discipline, lower deficits and reduced debt servicing costs, alongside stronger access to foreign financing, could support an upgrade in Ghana’s credit rating.
“It could raise the rating in the next 12–18 months if Ghana maintained low fiscal deficits, reducing debt service costs and strengthening its access to foreign financing, while its external position continued to strengthen, including via the accumulation of additional foreign currency reserves,” S&P said.
S&P affirmed Ghana’s long- and short-term foreign and local currency sovereign credit ratings at ‘B-/B’, maintaining a stable outlook. According to the agency, this reflects a balance between improving macroeconomic indicators supported by ongoing reforms and persistent structural vulnerabilities, including high debt servicing costs and exposure to commodity price fluctuations.
Ghana’s economic recovery has been underpinned by notable progress in its debt restructuring efforts following the 2022 default. The country completed its domestic debt exchange programme in 2023 and restructured $13.1 billion in Eurobonds in October 2024, bringing total restructured or agreed debt to approximately 97 per cent of the targeted amount.
Recent progress in negotiations with key creditors, including the African Export-Import Bank and holders of Saderea commercial notes, has further advanced the process after earlier setbacks.
At the same time, external sector performance has strengthened, supported largely by favourable gold prices. Ghana recorded a current account surplus of $9.35 billion, equivalent to 8.1 per cent of GDP in 2025, while gross international reserves rose to a record $14.5 billion.
Overall, S&P’s assessment underscores the fragile balance between Ghana’s ongoing macroeconomic recovery and the risks that could shape its credit trajectory in the near term, particularly the need to sustain reform momentum and navigate external uncertainties.
