S&P affirms Morocco, Ghana ratings; outlook stable amid global uncertainties

S&P Global has affirmed the sovereign credit ratings of Ghana and Morocco, maintaining a stable outlook for both countries despite rising geopolitical tensions involving the United States, Israel, and Iran that continue to fuel global uncertainty and inflationary pressures.

The rating agency on Friday affirmed Ghana’s ‘B-/B’ long- and short-term foreign and local currency sovereign credit ratings, with a stable outlook. It also affirmed Morocco’s ‘BBB-/A-3’ long- and short-term sovereign credit ratings, also with a stable outlook.

“The stable outlook balances Morocco’s strong structural reform momentum—supporting higher GDP growth, economic diversification, and fiscal consolidation—against significant uncertainty stemming from the Middle East conflict, as well as low GDP per capita, high unemployment, and vulnerability to climate-related shocks,” S&P said in a report.

For Ghana, the stable outlook reflects a balance between improving external and fiscal metrics—driven by ongoing reforms—and persistent risks, including high debt service costs, implementation challenges, and exposure to commodity price volatility, particularly gold, cocoa, and oil.

S&P noted that Morocco remains exposed to spillovers from the Middle East conflict through higher energy import costs, potential supply disruptions, and weaker external demand. Despite progress in renewable energy, the country continues to import a significant share of its hydrocarbon needs, leaving it vulnerable to price shocks.

Fiscal measures aimed at cushioning households and businesses from inflation could slow the pace of fiscal consolidation. In addition, Morocco’s economic performance remains closely tied to demand from key trading partners, particularly in Europe.

The firm also highlighted downside risks from disruptions to sulfur supplies—critical for fertilizer production—particularly if the Strait of Hormuz is affected. Phosphates and related products accounted for 21.3 percent of Morocco’s goods exports last year. It noted that OCP Group, which controls about 70 percent of global phosphate reserves and roughly one-third of exports, plans to double production by 2030, supported in part by rising demand from the US.

Growth outlook strengthened by investment, tourism

The North African nation’s growth outlook remains robust, with real GDP projected to average 4.4 percent between 2026 and 2029, following stronger-than-expected performance in 2025. Improved rainfall has boosted water reserves, supporting a recovery in agricultural output after years of drought.

More broadly, sound macroeconomic policies, strong export performance—particularly in tourism—and rising foreign direct investment have strengthened external buffers. Fiscal reforms are also supporting revenue growth, enhancing the government’s ability to manage external shocks.

Last year, the economy exceeded expectations, with real GDP growth estimated at 4.8 percent, driven by strong performance across mining, agriculture, construction, manufacturing, and power generation. Lower interest rates and subdued inflation supported consumption and investment, with the latter rising 17 percent year-on-year.

Looking ahead, growth will be supported by pro-business reforms, the new investment charter, and the Mohammed VI Investment Fund. Key sectors—including automotive, aerospace, construction, phosphates, and ICT—are expected to drive expansion, alongside continued strength in tourism. The country welcomed nearly 20 million tourists in 2025, up 14 percent year-on-year.

Ghana: Reforms and gold boost external position

Meanwhile, Ghana is nearing completion of its comprehensive debt restructuring following its 2022 default. The government has restructured domestic debt and $13.1 billion in Eurobonds, with agreements in principle covering about 97 percent of eligible debt.

“We understand the government has either completed restructuring or reached agreements in principle on close to 97 percent of debt within the restructuring perimeter,” S&P said.

Progress has also been made in negotiations with the African Export-Import Bank and holders of Saderea commercial notes, helping to resolve earlier disagreements among creditors. Improved terms of trade—particularly elevated gold prices—have strengthened the West African nation’s external position. The country recorded a current account surplus of $9.35 billion (8.1 percent of GDP) in 2025, while foreign reserves rose to a record $14.5 billion.

With Middle East tensions affecting traditional refining routes, Ghana is increasingly diversifying gold export destinations beyond Dubai to markets such as India.

The new administration, which assumed office in December 2024, has introduced fiscal rules aimed at preventing slippages, including a targeted primary surplus of 1.5 percent of GDP and a medium-term goal of reducing debt to 45 percent of GDP by 2034.

Despite these gains, S&P said the rating for Africa’s biggest gold producer remains constrained by weak—though improving—institutional capacity and high debt servicing costs. The economy also remains vulnerable to external shocks and climate risks, given its reliance on agriculture and gold exports.

While growth reached six percent in 2025, supported by improved macroeconomic stability, risks remain. A potential decline in gold prices or rising fertilizer costs linked to geopolitical tensions could weigh on exports, agricultural output, and inflation.

“We expect inflationary pressures to increase moderately this year but remain more contained than in recent years, supported by improving monetary policy credibility,” S&P said. However, inflation is projected to remain at the upper end of the Bank of Ghana’s 6–10 percent target range through 2029, with exchange rate stability seen as critical to anchoring expectations.