Fitch Ratings has upgraded Ghana’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to ‘B’ from ‘B-‘.
The Outlook is Positive, the global economic rating agency stated.
According to a note on its website, Fitch Ratings said the upgrade reflects a sharp fall in public debt/GDP, supported by robust real GDP growth, substantial fiscal consolidation efforts and currency appreciation, and a marked increase in international reserves that lowers external liquidity risks.
The Positive Outlook reflects expectations of continued fiscal prudence.
This it explained will be underpinned by improved public financial management, further normalisation of macroeconomic conditions evidenced by an expected decline in average inflation and a further building of external buffers.
Among the key rating drivers are falling debt, reserves accumulation, large current account surpluses, primary fiscal surpluses, high interest costs, contained debt service obligations, declining inflation, strong growth and ESG-Governance, on which it said: “Ghana has a medium World Bank Governance Indicators (WBGI) ranking at the 51st percentile, reflecting a recent record of peaceful political transitions, a moderate level of rights for participation in the political process, moderate institutional capacity, established rule of law and a moderate level of corruption.”
It listed public and external finances as factors that could individually or collectively lead to a negative rating action or a positive rating action.