The ratings agency says gold exports and fiscal reforms are holding up, but warns that a weakened central bank balance sheet could still drag Ghana down.
Standard and Poor's (S&P) Global, one of the three major international credit rating agencies, has affirmed Ghana's long-term and short-term credit ratings at "B-/B" for both foreign currency and local currency debt, and set the country's outlook at stable.
MyJoyOnline reports that the agency also kept its "B-" transfer and convertibility assessment on Ghana — a measure of how likely the government is to restrict access to foreign exchange for private borrowers repaying external debt.
What a 'B-/B' rating actually means
A "B-/B" rating sits in what S&P calls the non-investment grade category, commonly referred to as "speculative" or "junk". In plain terms, the agency judges that lending to Ghana carries high credit risk, that the country remains vulnerable to default, and that a downturn in the economy would likely weaken its ability to repay.
For Ghanaians abroad, the rating matters because it shapes the interest rate Ghana pays when it borrows on international markets. A weak rating means costlier borrowing, which feeds back into the national budget and, eventually, into taxes and public spending at home.
Why S&P held the rating
In its country report, the agency pointed to the expansion of the gold sector, which it says is improving Ghana's external position — that is, the country's foreign reserves and its balance with the rest of the world. It also judged the economy to be relatively resilient to the effects of the war in the Middle East.
S&P further credited ongoing fiscal reforms, which it noted are anchored by a new 36-month, unfunded policy coordination instrument from the International Monetary Fund (IMF).
The warnings
The agency was less comfortable with the Bank of Ghana's finances. It said the central bank's position has been weakened by the drive to build up foreign currency reserves quickly through gold exports, and that significant recapitalisation will be required.
S&P also expects the fiscal costs of the Ghana Gold Board (GoldBod) to remain high.
Beyond that, it listed the still-heavy cost of servicing public debt, contingent liabilities from state-owned enterprises and the central bank, the risk that reforms are not fully implemented, and Ghana's growing exposure to swings in the prices of gold, cocoa and oil.
What could trigger a downgrade
S&P said it could cut Ghana's rating within the next 12 to 18 months if deficits widen through fiscal slippage, if performance at the Bank of Ghana or GoldBod worsens, or if public debt and debt service costs come in materially higher than forecast.
A deterioration in export volumes or terms of trade could also force a downgrade, as could a stall in the debt restructuring process — for instance, if creditors fail to agree on comparability-of-treatment terms under the G20 Common Framework. The agency stressed that a stalled restructuring is not its base case.
The affirmation follows S&P's earlier upgrade of Ghana from "CCC+/C" to "B-/B", which came nearly three years after the country defaulted and suspended payments on Eurobonds worth US$13.1 billion during the 2022 debt crisis.
