The Minority Caucus in Parliament has welcomed the upgrade of Ghana’s economy by global ratings agency, Fitch.
Fitch explained that the upgrade is mostly based on the debt restructuring programme implemented in 2024 by the previous New Patriotic Party (NPP) government, particularly the completion in October 2024 of the restructuring of $13 billion with Ghana’s Eurobond holders.
This, it noted, signalled that the Ghanaian economy is strengthening its rebound after difficulties in 2023.
A statement jointly issued by Dr. Mohammed Amin Adam and Mr Kojo Oppong Nkrumah, Ranking Members on Parliament’s Finance; and Economy and Development Committees respectively, pointed out that
Ghana’s ability to service its debt obligations due to the reduction of the debt stock has now been formally acknowledged. “We take note that this is principally due to the debt
restructuring leading to a total debt relief of about $12 billion by the erstwhile NPP government.
“We acknowledge the efforts by the new NDC administration to complete the outstanding
$2.6 billion of commercial debts to be restructured. “The completion of the restructuring of this remaining 5% of the total debt parameters will be useful in completing the program.
“The debt restructuring has led to a positive outlook due to the reduced debt payment obligations in the medium to long term,” the statement added.
According to the Minority, Ghana’s risk of debt default has been largely neutralized, which has become the basis for the upgrade by Fitch.
“Another reason for the upgrade is the strong Current account surplus from 2024, which was a record 4.3% of GDP, although it projects the surplus to narrow eventually to 1.1% in 2026. “The Fitch upgrade also concedes that the declining inflation which started in 2022 with 44% to 23% in 2024, and then to 18% in May, 2025, will be helpful to the Ghanaian economy.
“It however warns that the prior advertised inflation target of 11% for 2025 may be missed; leaving end year inflation at a projected 15%.
“It touched on the resilience of the economy on account of the strong growth throughout the debt restructuring ending 2024 with 5.7%. It however projects that growth will decline to 4% in 2025 and 4.5% in 2026, both below the 2024 growth,” the Minority noted in the statement.
These developments, according to the Minority, vindicate the NPP’s stance that the economy bequeathed the NDC was strong and laid the foundation for accelerating economic development. “We are however worried that the upgrade report casts significant doubts on the credibility of the 2025 budget and the current government management of the economy.
“Specifically, Fitch does not think the government can achieve some of its critical budget targets for 2025.
“The government targets inflation of 11%, but Fitch projects the year to end at 15%. On fiscal performance, the government targets primary balance on commitment basis of 1.5% surplus, but Fitch projects the year to end with 0.5% surplus, a 1 percentage point deviation.
“This therefore casts doubt about the Government’s ability to meet the IMF target of 1.5% of primary balance on commitment basis.
“Fitch further questioned the credibility of the government revenue enhancement policy. It explains that the debt service to revenue ratio, an important benchmark mark of the IMF program is projected to worsen in 2025 and 2026, at 26% a deviation from the 2024 ratio of 25%,” the Minority noted.
According to the Minority, Ghana’s upgrade by Fitch would have been better than the current upgrade if these remaining risks were addressed. “Though this vindicates our concerns raised at budget time, we urge the government to take steps to ensure that further incidents that undermine the credibility of the 2025 budget are avoided.
“Accordingly, we call on the Minister for Finance to urgently revise the budget targets during the presentation of the mid-year Budget in July 2025 to reflect the true state of the economy,” the Minority concluded.
