The government of Ghana has through the Ministry of Finance, expressed its disappointment with S&P’s decision to downgrade Ghana.
A statement issued by the Ministry said the government had taken bold policies in 2022 to address macro-fiscal challenges and debt sustainability, which have been significantly exacerbated by the impact of these global external shocks on the economy.
S&P Global Ratings has downgraded Ghana to CCC+/C from B-/B.
It pushed Ghana’s debt further into speculative territory, lowering its foreign and local currency sovereign ratings
It said its outlook for the country is negative, “reflecting Ghana’s limited commercial financing options, and constrained external and fiscal buffers.”
It also indicated that the Covid-19 pandemic and the conflict in Russia have magnified Ghana’s fiscal and external imbalances.
But the Ministry in its rating said ”On 5th August 2022, Standard and Poor’s (“S&P”) Global Ratings downgraded Ghana’s foreign and local currency credit ratings from ‘B-/B’ To ‘CCC+/C’ with a negative outlook. According to S&P, the downgrade is due to intensifying financing and external pressures on the economy.
“In arriving at their decision, the credit rating agency considered: (a) the lingering effects of the COVID-19 pandemic and the severe global shock of the Russian invasion of Ukraine on Ghana and the consequent fiscal and external imbalances; (b) elevated gross financing needs in the face of International Capital Market hiatus (c) the limited commercial financing options; and (d) the credible steps taken by Government to fast-track fiscal consolidation and the passage of key revenue bills.
“The Government is disappointed by S&P’s decision to downgrade Ghana despite the bold policies implemented in 2022 to address macro fiscal challenges and debt sustainability which have been significantly exacerbated by the impact of these global external shocks on the economy.
“Government will continue to be proactive in addressing the impact of these external and domestic headwinds on the economy and on the lives and livelihoods of Ghanaians. Government has implemented key revenue and expenditure measures, including the 30% cut in discretionary expenditures. The delays in the passage of key revenue measures introduced in the 2022 Budget affected revenues performance in the first half of the year. However, all the revenue measures introduced in the 2022 Budget, including the review of the MDA Fees and Charges Bill, the Tax Exemption Bill, the E-Levy Bill, have all now been promulgated by Parliament. These fiscal measures are now in full implementation mode to support our fiscal and debt sustainability policies.”