Debt exchange, not reforms, behind Ghana’s ratings boost – Khalid

Sharif Mahmud Khalid, Economic Policy Advisor to the Vice President, has admitted that Ghana’s recent credit rating upgrade by Fitch is largely due to the Domestic Debt Exchange Programme (DDEP), not deep economic reforms.

Speaking on PM Express on Wednesday, June 17, Khalid explained that the move from ‘Restricted Default’ to ‘B-’ with a stable outlook was a result of technical gains from the DDEP.

“When we took office, we started to make some gains thanks to the Domestic Debt Exchange Programme,” he said. “The DDEP brought some relief, and that influenced external ratings.”

His remarks contradict earlier claims that the upgrade reflected strong fiscal discipline and macroeconomic reform. Instead, Khalid described the ratings improvement as “artificial,” stemming from debt restructuring rather than long-term transformation.

He added that Ghana’s reactivation of the sinking fund helped signal a commitment to debt servicing. “It acts like insurance for creditors,” he noted. “Activating the fund and committing to both domestic and external debt programmes has improved our outlook.”

However, Khalid was cautious when asked about spending cuts and fiscal control. He acknowledged that while budget projections suggest restraint, actual spending may differ. “The market reacts to the budget, whether a penny is spent or not,” he said.

He also stressed that the government’s focus remains on stabilizing the domestic market rather than rushing back to external borrowing. “This rating isn’t for the internal market,” he clarified. “It’s meant for the external audience.”

When asked if the government was becoming “bullish,” Khalid refrained from direct comment. “It’s about the government’s commitment and the signals we’re sending,” he concluded.