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Global credit ratings agency, Moody’s, has upgraded Ghana’s long-term local and foreign currency issuer ratings to ‘Caa2’ from ‘Caa3’ and ‘Ca.’
Also Moody’s shifted Ghana’s outlook from ‘stable’ to ‘positive,’ in view of the reduction in Ghana’s debt situation.
In a statement issued on Friday, Moody’s said the upgrade marked a significant improvement for Ghana, driven by the country’s extensive debt restructuring.
“The positive outlook reflects the potential for liquidity risk to ease amid ongoing fiscal consolidation efforts supported by an IMF programme,” Moody’s said.
It said it had completed a periodic review of Ghana’s ratings, including its long-term issuer ratings of Caa3 for local currency and Ca for foreign currency.
The upgrade in Ghana’s credit rating, according to Moody’s was a result of the country’s successful debt restructuring.
The nominal value of the country’s total debt value has been reduced by 37 per cent equivalent to $5 billion, due to the debt restructuring.
In view of the debt restructuring, Ghana has enjoyed debt savings of $4.3 billion as a result of the negotiation with the Eurobond holder to bring the interest rate on the Eurobond debt from eight to five per cent.
Ghana has successfully completed the restructuring of the $13 billion it owes to Eurobond holders with more than 98 per cent investors participation in the country’s consent solicitation.
Ghana’s foreign currency debt according to the Finance Ministry constituted nearly half of Ghana’s total debt.
Consequently, last week, the International Monetary Fund staff and Ghana reached an agreement on their third review of the country’s $3 billion Economic Facility Credit (ECF) programme.
As a result, the country is expected to receive $360 million before the end of the year to shore up its revenue when the IMF Executive Board approve Ghana’s third review.
Moody’s quoting the Ghana Statistical Service said Ghana’s economy had shown signs of recovery, with growth hitting 6.9 per cent in the second quarter of 2024, the highest in five years.
Moody’s projects a continued, though gradual, reduction in Ghana’s debt as the government resumes payments on its obligations
BY KINGSLEY ASARE
