Fitch and Moody’s downgrade Ghana’s creditworthiness
Ghana’s debt classified as highly speculative in the eyes of global investors
Investors announce their intention to take Ghana bonds to the international capital market
The government, through the Ministry of Finance, has stated that it remains committed to its fiscal consolidation program.
It comes after ratings agency Standards and Poor’s (S&P) kept Ghana’s creditworthiness at ‘B’ negative and ‘B’ with a stable outlook.
According to S&P, the latest credit rating is based on strong growth prospects for Ghana in the short to medium term.
Responding to the development in a statement issued by the Ministry of Finance, the government said: “We remain absolutely confident in our determination, in line with the President’s vision, to build a strong, resilient and prosperous entrepreneurial nation of Ghana in beyond help”.
“Looking ahead, the government remains fully committed to restoring fiscal rectitude in public finances. The recently announced expenditure rationalization measure to decisively strengthen fiscal consolidation in the 2022 budget underscores the government’s determination to address critical concerns concerning the economy, to create jobs for young people, to obtain a positive primary balance and to stabilize the debt”, adds the press release of the ministry.
He further pointed out that S&P’s recent ratings of Ghana’s credit at B- with a stable outlook “underscores their broad recognition of the challenges in the global economy due to the COVID pandemic and the long road to recovery that the country is facing. world economy is facing”.
“Amid these global challenges, their assessment of Ghana reflects the resilience of the Ghanaian economy and appreciation for the decisive policies that have been instituted to drive the recovery process,” he added.
The Ministry of Finance, in particular, said that S&P had taken note of the government’s recent policy announcement to further cut spending by 20% to reinforce the process of fiscal consolidation, and was reassured by this.
“Adding, they say, this very decisive step will help ensure fiscal sustainability and stabilize debt but could slow growth in the short term,” the ministry said.
Meanwhile, ratings agency S&P expects the government’s measures set out in the 2022 budget and beyond to control runaway debt growth should yield results.
“In its own assessment, S&P is confident that fiscal measures planned for 2022 and beyond should result in faster-than-expected consolidation of fiscal metrics, including stabilization of the public debt trajectory,” it read. in parts of the Department of Finance press release.