Ghana is seeking to secure an investment grade sovereign credit rating through its New Economy programme, in a strategic move aimed at reducing government borrowing costs, restoring investor confidence and creating greater opportunities for local businesses to access affordable long term financing.
Finance Minister Dr Cassiel Ato Forson disclosed the ambition during a New Economy engagement in Accra, where he outlined the government’s determination to consolidate the country’s economic recovery and strengthen its standing in international financial markets.
Dr Forson recalled that Ghana’s domestic bond market had virtually ground to a standstill in 2022 following the country’s sovereign debt default and the subsequent implementation of the Domestic Debt Exchange Programme (DDEP).
He explained that the debt restructuring exercise had significantly disrupted the financial system, leaving local banks without access to important credit lines and constraining their ability to participate effectively in the domestic bond market.
According to the Finance Minister, the situation has since improved, with Ghana regaining access to credit facilities and securing a B credit rating. However, he stressed that the government’s ambition extended beyond the country’s current rating, with investment grade status identified as the next major objective.
“We want to get to investment grade,” Dr Forson stated, emphasising the importance of achieving a stronger credit profile to support Ghana’s long term economic and financial development.
An investment grade classification generally indicates that a country’s sovereign debt has attained a level of creditworthiness considered suitable for investors seeking comparatively lower default risk. Such a development could expand the range of institutional investors eligible to purchase Ghanaian government securities, particularly investment funds whose mandates restrict them to bonds meeting specified credit quality thresholds.
An expanded investor base could increase demand for government securities, improve competition among prospective lenders and potentially enable the state to secure financing at more favourable interest rates.
However, attaining that classification would require sustained improvements in public finances, debt management, economic stability and the government’s capacity to meet its financial obligations. It would also depend on assessments conducted independently by international credit rating agencies.
The anticipated gains are not limited to government financing. Dr Forson believes that an improved sovereign credit profile could have significant implications for the country’s private sector, particularly by creating more favourable conditions for businesses seeking long term investment capital.
A stronger national credit rating could help improve corporate borrowing conditions and accelerate the development of Ghana’s domestic corporate bond market, providing businesses with an additional avenue for raising funds beyond conventional bank lending.
Through corporate bonds, companies could mobilise substantial long term resources from investors to acquire machinery, modernise production facilities, increase manufacturing capacity and undertake new commercial ventures.
The Finance Minister maintained that achieving investment grade status would establish an important foundation for the expansion of corporate bond financing and other investment opportunities.
“If we are able to get to investment grade, we would have laid the foundation for corporate bonds and others to take off,” Dr Forson said.
He nevertheless acknowledged that reaching the desired credit standing would require Ghana to preserve macroeconomic stability, maintain a predictable economic environment and demonstrate the consistency of policies necessary to sustain the country’s recovery.
The government’s ambition, therefore, goes beyond improving its position on international credit rating assessments. It also seeks to restore confidence in Ghana’s financial markets, broaden access to long term capital and create a stronger financing environment for domestic enterprises.
