S&P Global Ratings has maintained Ghana’s long- and short-term foreign and local currency sovereign credit ratings at B-/B, with a stable outlook, but has warned that the country could face a credit rating downgrade over the next 12 to 18 months if fiscal and debt-related risks worsen.
The ratings agency said Ghana’s current rating reflects both the progress made in addressing the country’s fiscal and debt challenges and the risks that remain within the economy.
According to S&P Global, a deterioration in Ghana’s fiscal position could place additional pressure on the country’s creditworthiness. It identified persistent fiscal deficits and high debt-servicing costs among the key risks that could influence the rating over the medium term.
The agency also pointed to rising liabilities linked to state-owned enterprises and the Bank of Ghana as areas requiring close monitoring.
S&P Global further expressed concern about the pace and effectiveness of Ghana’s economic and fiscal reforms, stressing that weak implementation could undermine efforts to improve the country’s debt position.
It warned that if fiscal and debt-related risks deteriorate, the government’s ability to meet its debt obligations could come under greater pressure, potentially resulting in a downgrade of Ghana’s sovereign credit rating within the next 12 to 18 months.
However, S&P Global also outlined conditions that could support an improvement in Ghana’s credit rating. The agency said the rating could be upgraded over the same period if the country sustains low fiscal deficits, reduces its public debt and improves access to credit.
Strengthening Ghana’s foreign-exchange reserves could also support an upgrade, according to the ratings agency.
The assessment underscores the importance of maintaining fiscal discipline and ensuring that economic and fiscal reforms are implemented effectively.
For Ghana, the warning places continued emphasis on the government’s ability to manage public finances, contain debt-related risks and strengthen the country’s financial position while sustaining the reforms currently underway.
S&P Global’s stable outlook means that, for now, the agency does not expect an immediate change in Ghana’s rating. However, the identified fiscal, debt and reform-related risks remain important factors in determining the country’s credit trajectory over the coming 12 to 18 months.
Story by Ama Frimpomaa