Moody's raises its outlook for Ghana to positive: Has the era of economic recovery begun?

In a move reflecting signs of a financial breakthrough in the West AfricaMoody's credit rating agency has revised its outlook for the Republic of Ghana from "stable" to "positive," with this shift driven by a marked improvement in the country's financial performance as it strives to recover from its deepest economic crisis in decades.

Signs of economic recovery in Ghana

Ghana is a major producer of gold, oil and cocoa, and signs of stability have begun to appear clearly in its monetary policies.

In its report issued yesterday, Friday, Moody’s indicated that domestic financing costs have seen a significant decrease as a result of monetary easing policies and improved fiscal balance, stressing that the gradual return to issuing domestic bonds will contribute to reducing debt renewal risks in the long term.

Returning to the bond markets and achieving growth in 2026

Finance Minister Kacel Ato Forsson had already painted a picture of optimism during his interview with parliament last November, asserting that the country was poised for sustainable growth by 2026. Key practical steps in this direction include:

1- Restrictions on issuing new local bonds were lifted last March.

2- The first seven-year domestic bonds were issued in April, ending the pause imposed in 2023 following the debt default crisis.

Existing challenges and a cautious classification

Despite the positive outlook, Moody's preferred to maintain Ghana's rating at "Caa1", due to the continuation of some credit constraints and the high sensitivity to fluctuations in exchange rates and commodity prices.

The agency also warned of the impact of geopolitical tensions, particularly the ongoing conflict in the Middle East, which could cast a shadow over the stability of global markets and energy prices.