Audio By Carbonatix
Ratings agency, S&P Global has stated that Ghana's institutional arrangements are weak, but improving.
According to the US-based firm, the cost of servicing government debt remains elevated, saying, the weak institutional arrangements and the high servicing debt constrain Ghana’s ratings.
In its rating article on Ghana, it warned that the Ghanaian economy is reliant on agriculture (20% of Gross Domestic Product) and gold exports (over 66% of goods exports in 2025), which exposes it to erratic weather and external shocks.
“If gold prices fall faster than expected, the value of Ghana's exports would also fall. In addition, the agriculture sector could struggle due to El Nino-induced droughts or flooding, or if the Middle East war is prolonged, triggering further rises in fertilizer costs”.
“Either could disrupt the recent easing of inflationary pressures. The administration's fiscal reforms are still at an early stage and have yet to be tested through an election cycle. Therefore, we see potential for fiscal slippages to occur through 2029”, it added.
It also explained that measures to strengthen public finances are working, but have yet to be tested through economic and electoral cycles.
It added that the government is continuing to advance its reform agenda--in particular, its commitment to improving the management of public finances. However, the effectiveness of its new institutional measures has yet to be fully tested. “The administration has a strong mandate, with a 46-seat majority in the 276-member parliament, and is led by the National Democratic Congress (NDC) under President John Mahama”.
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