Ghana’s economy just got a major boost from Moody’s, a global credit ratings agency. On Friday, Moody’s upgraded Ghana’s long-term local and foreign currency issuer ratings from “Caa3” to “Caa2” and from “Ca” to “Caa2”, respectively. This upgrade is a significant indication that Ghana is making progress in managing its debt and improving its economic stability.
The upgrade didn’t stop there. Moody’s also revised Ghana’s outlook from “stable” to “positive”. This change reflects the agency’s confidence in Ghana’s potential to ease liquidity risks, thanks to ongoing fiscal consolidation efforts supported by an International Monetary Fund (IMF) program.
But what’s driving this positive trend? Ghana’s economy has been growing at an impressive rate. In the second quarter of 2024, the country’s economy expanded by 6.9%, its fastest growth in five years. This growth is attributed to the services sector, which grew by 5.8%, and the industrial sector, which expanded by 9.3%.
The agricultural sector also saw growth, albeit at a slower pace, with a 5.4% increase. This growth is particularly notable given the challenges faced by the cocoa subsector, which contracted by 26.2%.
Moody’s expects Ghana’s debt to continue decreasing, albeit slowly, as the government resumes paying interest and principal on all its debts. This reduction in debt will likely contribute to improved economic stability and increased investor confidence.
Ghana’s economic growth is also driven by its key sectors, including transport and storage, information and communication, trade, and financial and insurance activities. The country’s GDP growth rate is expected to average around 4.3% in 2025 and 4.8% in 2026.
The IMF program has played a significant role in supporting Ghana’s economic recovery. The program has helped the government implement austerity measures and fiscal consolidation efforts.
The upgrade by Moody’s is a testament to Ghana’s commitment to economic reform. The country’s efforts to manage its debt and improve its economic stability have not gone unnoticed.
In the long term, Ghana’s economic prospects look promising. The country’s growth is expected to be driven by its natural resources, including gold, oil, and cocoa.
Moody’s upgrade is a positive development for Ghana’s economy. It reflects the country’s progress in managing its debt and improving its economic stability, and it’s a sign of increased investor confidence in Ghana’s economic future.
