Introduction
On June 16, 2025, Fitch upgraded Ghana’s sovereign credit rating to B‑, signaling a significant change from ‘Restricted Default’ to a non-default position with a stable outlook (reuters.com). Fitch underlined two important factors in its decision; first, a reconciliation of relations with commercial creditors and second, the completion of stringent debt restructuring, most notably the USD 13.1 billion Eurobond exchange in October 2024 (nairametrics.com). Coupled with an earlier upgrade from S&P in May, Ghana’s ratings improvement signals a broader recovery in fiscal credibility (thebftonline.com).
This upgrade is not merely symbolic. Ghana’s real GDP growth rebounded to 5.7% in 2024 (from 2.9% in 2023), with a forecast of ~4% in 2025, underscoring a profound economic recovery (leadership.ng). Concurrently, the phenomenal 42% appreciation of the cedi against the dollar since January, now bolstered by disciplined monetary management (increasing reserves to ~US$10.6 billion and inflation falling to ~13.7% by July), supports stronger macroeconomic stability (nairametrics.com). Financing tailwinds are already apparent. Fitch projects that Ghana’s public debt-to-GDP ratio will decline from 77% in 2023 to ~68% by 2026, driven by fiscal consolidation and growth, reducing debt-servicing burdens and freeing substantial resources for development and security (ourhomelandghana.com).
From a scholarly perspective, research indicates credit ratings exert a real impact on sovereign leverage capacity and capital structure: moving from below-investment grade (B/B‑) upwards tends to expand borrowing capacity by about 7 to 9 percentage points, while also reducing costs and enhancing institutional trust, especially for countries progressing through speculative categories (Wasserbacher & Spindler, 2024). This transformation in Ghana not only improves its ability to fund large scale infrastructure and resource planning but also underpins fiscal stability necessary for robust national security.
Simply, Ghana’s B-grade is not just a technical rating revision; it signifies a shift towards a virtuous cycle, where lower borrowing costs and investor confidence support infrastructural development, economic governance, and better fund law enforcement, cyber defense, security and initiatives of social stability.
What does B- rating mean?
Fitch, a prominent global credit ratings agency in the financial markets which provides credit ratings, research, and data analytics to investors and other market participants, placed Ghana firmly in the “speculative-grade” category which is only one level above default and indicates a considerable default risk with little room for error (fitchratings.com). Citing strong macroeconomic indicators like falling debt ratios, growing nominal GDP, and better local-currency debt payment capacity, Fitch upgraded Ghana to a B- rating. What this means is
1. Sovereign credit upgrades, even within speculative grades, can lower borrowing costs and reduce risk premiums (Chang et al., 2023). For instance, moving from B to BB typically lowers bond yield spreads by 100 base points, indicating improved investor confidence (Anastasatou et al., 2023).
2. Ghana’s B-, will gain significant fiscal space by freeing up resources for development and governance functions. An example is Greece’s post-upgrade scenario resulting in lower spreads, promoting economic stabilization (Anastasatou et al., 2023).
3. It will reduce information asymmetries and facilitate entry into global bond markets. According to Luitel & Vanpée (2018), obtaining a sovereign rating typically leads to a 3% of GDP increase and boosts portfolio investment by 1–2% of GDP which are signs of increased attractiveness.
4. Beyond capital markets, a sovereign upgrade enhances domestic financial sector resilience, thus, household and corporate lending often benefit as banks face lower funding costs, reduce their reliance on government debt, and expand lending to productive private sectors (Anastasatou et al., 2023).
The security dividend
A higher credit rating directly expands Ghana’s fiscal room. As debt servicing costs drop, freed-up resources can be reallocated to policing, digital defense systems, and emergency response. Scholarly evidence confirms this: sovereign rating upgrades increase government expenditures on public security by up to 0.3–0.5% of GDP, especially in emerging economies transitioning from default risk (Meyer & Mothibi, 2021).
Furthermore, lower borrowing costs allow Ghana to increase public security budgets without compromising macroeconomic stability. IMF data highlights that better fiscal management
supports improved funding conditional on maintaining stability (Daniel, 2006). With extra budgetary capacity, Ghana could expand personnel, training programs, and operational readiness across the police, paramilitary units, and border control agencies.
Ghana has made significant strides in digital defense through cybercrime laws from 2008 to 2012, the National Cyber Security Centre, and the Cybersecurity Act in 2020 (Ministry of Communication and Digitalization; NCSAM 2021Report). With improved credit ratings, the government can invest in strengthening digital infrastructure, addressing cyber threats and protecting critical infrastructure.
Ghana’s B- rating can aid in financing integrated security planning for large-scale infrastructure projects, such as dams, mining sites, and power grids, which often face security risks like illegal mining, land conflicts, and sabotage (aninver.com).
Theoretically and practically, economic stability results in societal peace because social unrest is decreased when the economy is stable. Upgrades in ratings have the tendency to stabilize currency and minimize inflation, which lessens suffering and reduces waves of crime or protest. A safer investment climate and a reduction in economic complaints are expected as a result of Ghana’s return to growth (Chang et al., 2023).
Linking Governance, Transparency and Economic Stability
Ghana’s rating upgrade to a B-rating is a result of significant institutional reforms, including strengthened anti-corruption laws, advanced asset-declaration systems, and electronic public procurement since 2019 (IMF Report, 2024). These reforms align with Fitch’s focus on normalized creditor relationships and improved fiscal transparency, as reported by the IMF.
Transparency is crucial for maintaining institutional credibility and sustaining rating stability. The African Peer Review Mechanism and UN-ECA supported a workshop in Accra to clarify sovereign credit assessment methods (aprm.au.int). Research from 117 countries shows that robust governance indices predict high levels of information transparency, which can improve ratings (Khosrowjerdi, 2022).
Ghana has improved service efficiency and regulatory quality through digitization of public services, particularly under the 2018-2019 Public Sector Reform program (IMF Report, 2024). Despite performing above the Sub-Saharan African average in government effectiveness and rule of law, challenges remain in underfunding and inconsistent enforcement (IMF Report, 2024).
Strong governance and transparency are crucial for Ghana’s B-credit rating, reducing policy uncertainty and minimizing institutional risks, and attracting more foreign direct investment, as highlighted by the UNDP-backed study (aninver.com, reuters.com). In Ghana’s case, coherent policymaking, sustained fiscal discipline, and growing institutional trust are creating a more stable environment that not only supports economic growth but also enhances security across physical, economic, and digital domains.
Conclusion
Ghana’s recent B-credit rating by Fitch signifies significant progress in economic stability, institutional reform, and public financial management. The rating boosts investor confidence, allowing for more affordable financing and critical investments in infrastructure, security, and social services. It also serves as a benchmark for Ghana’s debt management, policy discipline, and transparency.
However, maintaining and improving this rating will require continued focus. Ghana must build on recent gains by enforcing fiscal rules, funding key institutions, and further enhancing transparency and accountability. If successfully managed, the B‑ rating could serve as a stepping stone toward greater economic resilience, social stability, and inclusive development.
Source: CISA Analyst
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