Fitch Ratings has cautioned that Ghana still faces several risks that could trigger a credit rating downgrade, even after the agency recently upgraded the country’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B-’ with a Stable Outlook.
In its latest review, Fitch outlined key vulnerabilities, warning that any resurgence of liquidity pressures could compromise Ghana’s ability to meet its debt obligations. Such pressures may stem from weaker-than-expected fiscal consolidation efforts or the realisation of contingent liabilities.
Another significant risk factor is reduced investor confidence in Ghana’s debt refinancing prospects. The agency noted that difficulties in accessing the local-currency bond market or persistent market closures could further strain financing options, particularly for short- to medium-term debt.
Fitch also highlighted potential external risks, including a decline in international reserves—especially if current account deficits persist over time. A drop in reserves would increase vulnerability to external shocks and limit the country’s financial flexibility.
Despite these concerns, Fitch acknowledged that Ghana could achieve further rating upgrades if certain conditions are met. These include a sustained reduction in debt-to-GDP levels, supported by credible and effective medium-term fiscal consolidation. A steady accumulation of foreign exchange reserves, approaching the median levels of other ‘B’-rated sovereigns, would also enhance macroeconomic stability and strengthen investor confidence.
Country Ceiling Maintained at ‘B-’
Fitch affirmed Ghana’s Country Ceiling at ‘B-’, consistent with the sovereign rating. The agency noted that there are currently no material barriers restricting private sector entities from converting local currency to foreign currency or transferring funds offshore to meet debt obligations.
ESG Factors Affecting Ghana’s Credit Profile
On Environmental, Social and Governance (ESG) considerations, Fitch assigned Ghana an ESG Relevance Score of ‘5’ for Political Stability and Rights. This score reflects underlying governance challenges that continue to weigh on the country’s creditworthiness.
Ghana also received a score of ‘4’ for Creditor Rights, with Fitch emphasizing that the government’s willingness and ability to meet its debt commitments remains a critical component of the country’s overall credit rating.
While the recent upgrade reflects progress in economic recovery and fiscal reform, Fitch’s assessment underscores that maintaining the positive trajectory will require continued discipline, effective policy execution, and vigilant management of both domestic and external risks.
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