By Bernard TETTEH-DUMANYA (Dr)
In a significant endorsement of Ghana’s economic recovery efforts, Fitch Ratings has upgraded the country’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from ‘Restricted Default (RD)’ to ‘B-‘, with a Stable Outlook.
This positive reassessment signals the country’s progress in normalizing relations with external creditors and undertaking critical fiscal reforms. While the rating upgrade restores a measure of investor confidence, its broader implications for the average Ghanaian hinge on the government’s ability to sustain and build on these gains.
Yet, in the midst of this achievement, one is left to question how Dr. Mahamudu Bawumia former Head of economic management team and Vice President in the previous administration can suggest that the current government has made no deliberate efforts to reverse the economic deterioration inherited from his regime.
The upgrade by Fitch is not coincidental, it is a recognition of the determined actions taken under the leadership of the current NDC administration and we need to applaud them. Ghana’s recovery, still fragile, has begun to reflect internationally, thanks to measurable policy reforms and fiscal discipline.
At this critical juncture, it is imperative for the political class to move beyond self-glorification and partisan triumphalism. Ghana does not need political messiahs but rather nation builders.
Rather than obstructing recovery efforts for political gain, the opposition must demonstrate a commitment to the national interest. If the minority party genuinely seeks to appeal to undecided voters, it must abandon the reflexive “opposition-for-opposition’s-sake” mentality.
The challenges faced by Ghanaians are real, and any political party aspiring to lead must contribute constructively but not undermine recovery efforts that seek to lift citizens from hardship. The decisive electoral rejection the NPP suffered should serve as a humbling reminder, not an excuse for revisionism or sabotage.
Fitch’s decision to upgrade Ghana’s Long-Term Foreign-Currency Issuer Default Rating is anchored in several critical indicators that reflect the country’s improving macroeconomic stability and renewed commitment to debt sustainability. First and foremost is the success of Ghana’s debt restructuring efforts, which served as the primary catalyst for the rating upgrade. In October 2024, the government finalized the restructuring of approximately US$13.1 billion in Eurobond debt.
This achievement, along with near-concluded negotiations with other external creditors, has significantly reduced the country’s debt service burden and mitigated the risk of default.
Secondly, the government’s strong fiscal consolidation measures have begun to yield results. Under the current NDC administration, Fitch projects a primary budget surplus of 0.5percent of GDP in 2025, compared to a deficit of 1.7percent in 2024. This turnaround is largely attributed to improved domestic revenue mobilization and tighter expenditure controls. The interest-to-revenue ratio, while still elevated, is forecasted to decline to around 26percent in 2025 and 2026, from a distressing peak of 48percent in 2021.
Third is the trend of disinflation and exchange rate stability. After inflation surged above 50percent in 2022, it has since moderated significantly, dropping to 18.4percent by May 2025. Fitch anticipates a continued decline, projecting 15percent by the end of 2025 and 10percent by 2026. This trajectory has been supported by sound monetary policy and the strengthening of the Ghanaian Cedi since April 2025, which has helped to reduce imported inflation. Fourth, Ghana’s economic growth has proven resilient, despite the strain of prolonged debt negotiations.
The outlook remains optimistic, with GDP growth projected at 4.0percent in 2025 and 4.5percent in 2026, driven by a rebound in the agriculture sector (especially cocoa), and sustained expansion in the industrial and services sectors. Fifth, the accumulation of international reserves provides a strong external buffer. Over recent months, Ghana’s gross international reserves have increased to US$6.8 billion, equivalent to approximately three months of import cover. This enhanced reserve position serves as a cushion against external shocks and currency volatility.
Together, these developments present a clear narrative: Ghana is steadily emerging from a deep economic crisis. The progress achieved thus far has been shaped in large part by reforms under the IMF-supported Post-COVID Programme for Economic Growth (PC-PEG). If maintained and deepened, these reforms could anchor a more robust and inclusive economic future for the country
Implications for Ghanaians
While the ‘B-‘ rating still places Ghana in the “highly speculative” category, the upgrade carries tangible implications for the lives of ordinary Ghanaians. The upgrade signals renewed investor confidence in Ghana’s economic trajectory. This can translate into increased foreign direct investment (FDI) and improved access to international capital markets.
For Ghanaians, this means More foreign investment can lead to the establishment of new businesses or expansion of existing ones, generating employment opportunities, Easier access to capital allows the government to fund crucial infrastructure projects like roads, hospitals, and schools, improving living standards, The government may be able to borrow at lower interest rates, freeing up funds for social programs and essential services rather than debt servicing.
Additionally, there will be stabilized macroeconomic environment where the underlying factors for the upgrade—falling inflation and a stronger cedi—directly benefit households. This may include lower inflation which means that the purchasing power of the Ghanaian Cedi is more stable, allowing families to better manage their budgets and afford basic necessities; and reduced volatility in the Cedi means that the prices of imported goods, including fuel and certain foodstuffs, are more predictable, easing financial planning for individuals and businesses.
The rest include a stable macroeconomic conditions encourages local businesses to plan for the long term, invest, and expand, further contributing to job creation and economic growth; and the upgrade enhances Ghana’s credibility on the global stage, making it a more attractive partner for trade and development initiatives. This can lead to more favorable trade terms and increased support from international organizations.
However, it is crucial to acknowledge that the benefits may not be immediately felt by all Ghanaians. Challenges like domestic debt service, which remains a pressure point, and ongoing public expenditure constraints still exist. In order to build on this positive momentum and ultimately achieve an investment-grade rating, the Ghanaian government must commit to a sustained and disciplined approach:
- Maintain fiscal discipline and prudent public financial management:
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- Adhere to budgetary targets: Strict adherence to fiscal consolidation targets, particularly achieving and sustaining primary surpluses, is paramount. This includes avoiding fiscal slippages, especially in election years.
- Enhance revenue mobilization: Diversify and strengthen tax collection mechanisms, broaden the tax base, and reduce tax exemptions to improve government revenue without overburdening citizens.
- Rationalize expenditure: Continue to streamline government spending, eliminate wasteful expenditures, and ensure efficient allocation of resources to productive sectors.
- Complete debt restructuring: Finalize all outstanding external debt restructuring agreements expeditiously to fully alleviate debt burdens and rebuild trust with all creditors.
- Sustain macroeconomic stability:
- Rigorous monetary policy: The Bank of Ghana must continue to implement a firm monetary policy to bring inflation within target ranges and maintain cedi stability.
- Build reserves: Continue to accumulate international reserves to provide robust buffers against external shocks and enhance Ghana’s ability to meet foreign currency obligations.
- Promote structural reforms and improve governance:
- Strengthen rule of law and institutions: Address persistent governance and corruption challenges. A strong legal framework and effective institutions are critical for attracting and protecting investment.
- Improve business environment: Implement reforms that reduce bureaucracy, simplify business licensing, and promote a transparent and predictable regulatory environment to attract both local and foreign investment.
- Diversify the economy: Reduce reliance on volatile commodity exports by investing in and promoting diversification into sectors like manufacturing, technology, and services, creating more resilient growth.
- Human capital development: Invest in education, healthcare, and skills training to enhance the productivity of the workforce and foster innovation.
- Engage proactively with creditors and investors:
- Transparent communication: Maintain open and transparent communication with all creditors and potential investors, demonstrating commitment to sound economic management and reforms.
- Investor roadshows: Actively engage in investor roadshows to showcase Ghana’s investment opportunities and explain the progress of its economic reforms.
The Fitch upgrade is a testament to Ghana’s resilience and the effectiveness of its recent economic reforms. However, it is not an end in itself but rather a crucial steppingstone. By remaining committed to fiscal discipline, macroeconomic stability, and structural reforms, the government can sustain this positive trajectory, attract more investment, and ultimately deliver a more prosperous future for all Ghanaians. The path ahead requires unwavering dedication and strategic foresight to translate this improved rating into tangible, long-lasting benefits for every citizen.
>>>the writer is a distinguished Ghanaian financial economist and consultant with nearly three decades of experience spanning academia, corporate finance, and agribusiness. He has held pivotal roles at institutions such as UBA Ghana, SIC Financial Services, Empretec Ghana, and the Swiss International Finance Group, reflecting his profound understanding of global finance. Renowned for pioneering efforts in risk management, compliance, and corporate strategy, Dr. Tetteh-Dumanya has significantly contributed to Ghana’s financial landscape. His expertise encompasses venture capital, business and financial reengineering, and fundraising, playing a crucial role in the growth and development of numerous entities. Driven by a commitment to capacity development, he has provided consultancy services to a diverse array of local and multinational organizations, including GIZ, AGRA, SNV, DANIDA, and USAID. As the CEO of SGL Royal Kapita, he has introduced innovative investment services targeting Ghana’s agriculture sector, aiming to support farmers and agribusinesses in achieving financial stability and growth. Beyond his professional endeavors, Dr. Tetteh-Dumanya is an influential columnist, offering incisive analyses on Ghana’s economic policies and advocating for strategic financial mechanisms to enhance the nation’s economic sovereignty. For inquiries, Dr. Tetteh-Dumanya can be reached at: [email protected]
