Ghana’s recent credit rating upgrade by Fitch Ratings could significantly improve the country’s economic prospects, though structural challenges remain, according to U.S.-based finance professor Pat Obi of Purdue University Northwest.
The upgrade from Restricted Default to B- with Stable Outlook marks an important milestone in Ghana’s economic recovery but requires sustained reforms to yield lasting benefits.
Professor Obi identified five key advantages from the improved rating. First, Ghana may now access cheaper financing, potentially reducing borrowing costs for infrastructure projects and enabling favorable debt refinancing terms. Second, the upgrade could boost foreign investor confidence, particularly in energy, mining and infrastructure sectors, by signaling improved fiscal management. Third, it reinforces Ghana’s recent macroeconomic stability, evidenced by declining inflation from 23% to 18% and currency strengthening.
The finance expert also noted potential trickle-down effects including lower commercial lending rates, as the current 28% policy rate exceeds inflation by 10 percentage points. Finally, improved credit conditions could stimulate business expansion, job creation and higher incomes in the medium term. “That’s where the real impact lies – translating macro stability into better livelihoods,” Obi stated.
However, the professor cautioned that Ghana still allocates 25% of government revenue to interest payments, indicating persistent fiscal pressures. External risks including commodity price volatility and global trade tensions could also undermine progress. While acknowledging the upgrade as positive validation of Ghana’s reform program, Obi emphasized the need for continued fiscal discipline and structural adjustments to sustain the gains.
The analysis comes as Ghana implements its IMF-supported economic program, with recent improvements helping stabilize the economy after years of financial strain. Market observers will watch whether the rating boost translates into tangible benefits for businesses and consumers in coming months.
