The Economic Policy Advisor to the Vice President, Dr Sharif Mahmud Khalid, says Ghana’s recent credit rating upgrade by Fitch is a direct response to government’s demonstrated fiscal discipline and transparency in budgeting, not necessarily its actual expenditure.
He explained that the capital markets are not waiting for government to disburse funds before reacting.
Instead, their assessments are based on budget signals and the government’s stated commitments.
“Once the budget is read, the market responds — whether you spend a penny or not. Because the market knows what you’re going to spend. You’ve done the allocations, the appropriations, and the market takes care of that,” Dr Sharif Khalid stated.
He was responding to a question about Ghana’s latest credit rating improvement by Fitch, which upgraded the country’s Long-Term Foreign-Currency Issuer Default Rating from ‘Restricted Default’ to ‘B-’ with a Stable Outlook.
“So for me, I wouldn’t say the government is getting bullish,” Khalid said. “But this is not about internal hype. When we talk about Fitch and others, we’re talking about external ratings, not just our domestic market.”
Dr Sharif Khalid argued that Ghana is not currently focused on the external market for borrowing. Instead, the government is prioritising stability within the domestic economy and reinforcing its own internal checks.
“We believe in stabilising the domestic market. That’s why we’ve strengthened internal controls — reduced appointments, tightened oversight — and those are clear signals.”
He pushed back against suggestions that the government’s fiscal performance was merely cosmetic, citing structural moves like the reactivation of the Sinking Fund and implementation of the Domestic Debt Exchange Programme as foundational to the upgrade.
“When we took office, we reactivated the Sinking Fund and committed to paying. That’s insurance. Fitch doesn’t just hand you a B minus unless you’ve taken serious steps to reduce your risk of default,” Khalid explained.
He agreed with co-panellist Prof. Godfred Bokpin that the domestic debt exchange had played a role in shifting the fiscal outlook. But Khalid stressed that it was the government’s resolve that triggered Fitch’s nod.
“The Domestic Debt Exchange gave us some gains. But beyond that, our commitment to both external and domestic debt resolution frameworks made the difference.”
Ghana is still engaged with the Paris Club, China, and other external creditors.
But according to Dr Sharif Khalid, those negotiations have already been factored into how the market views Ghana’s solvency risk.
“If you’ve committed to debt restructuring and you’re delivering, then of course there’ll be some rating recovery. These things don’t happen by accident. They’re results of real work.”
As for spending concerns, Dr Sharif Khalid reiterated that perceptions of overspending should be tempered by the broader context of fiscal management.
“There’s paper spending. But again, markets read policy intentions and discipline. That’s why Fitch and others have responded. It’s about the credibility of your framework.”
He concluded by urging Ghanaians to focus not just on expenditure, but on what he called the “total policy posture” of the government.
“You don’t get this kind of upgrade just by standing still. It’s a reflection of credibility, commitment, and strategy.”
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