Editorial: Cautious optimism greets Fitch’s recent upgrade

Mr. Courage Boti, Manager-Macroeconomic Research, GCB Bank, has welcomed Fitch’s recent upgrade of Ghana’s Long-Term Foreign-Currency Issuer Default Rating from ‘Restricted Default’ to ‘B-minus’ – but cautions that the country remains in speculative-grade territory and must intensify reforms to exit the danger zone.

Fitch said its decision reflects progress in restructuring the Eurobond and bilateral debts, with US$13.1billion in Eurobond obligations restructured in October 2024 and a US$5.1billion memorandum of understanding on bilateral official debt concluded in January 2025.

It estimates that just US$700million in external debt remains unresolved and is unlikely to affect the overall rating trajectory.

Mr. Boti stressed that Ghana remains far from reclaiming full market confidence.

“It is not a big upgrade – we are still just a notch above our previous status and there is a long way to go before we are in a position of comfort. The work needs to continue until we completely come out of the woods.”

Fitch highlighted government’s policy execution and macroeconomic reforms as key drivers of the upgrade. However, the agency also pointed to fiscal risks.

This new administration is targetting a primary surplus of 1.5 percent of GDP in 2025. Fitch forecasts a more conservative 0.5 percent surplus in 2025, rising to 0.9 percent in 2026.

Public debt will expectedly decline to 60 percent of GDP in 2025 and hold steady in 2026, falling from 72 percent in 2024 and a peak of 93 percent in 2022.

According to Mr. Boti, this marks important progress but should not lead to complacency. “We must continue to rebuild our buffers and improve domestic resource mobilisation,” he advised.

He also warned against any premature return to the international capital markets.

Fitch estimates foreign-currency debt service at 1.2 percent of GDP in 2025 and 1.4 percent in 2026, with interest payments making up roughly one-third of these obligations.

Domestic debt service remains elevated, with 3.8 percent of GDP due in 2025 and 3.9 percent in 2026 – almost entirely from interest payments.

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