Tuesday, February 7, 2023
Rainbow Radio
  • Home
  • General News
  • Governance
  • Sports
  • Politics
  • Health
  • Entertainment
  • Economy
  • Home
  • General News
  • Governance
  • Sports
  • Politics
  • Health
  • Entertainment
  • Economy
No Result
View All Result
Rainbow Radio Online
Home Business

Fitch Downgrades Ghana to ‘CCC’

August 10, 2022

Fitch has downgraded Ghana’s sovereign risk within the space of a week and with a negative outlook after the S&Ps rating.

Fitch Ratings downgraded Ghana’s Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) to ‘CCC’ from ‘B-‘. Fitch typically does not assign Outlooks to sovereigns with a rating of ‘CCC+’.

RelatedPosts

Unexpected turnout in DDEP could worsen our economic situation – Ofori-Atta

Claims by GRA that we’re evading taxes and Rambo-style arrests of managers are regrettable – Maxmart

The law will deal with you ruthlessly if you evade taxes – GRA to business owners

The details of the rating as published on the official website of the rating agency explained that the downgrade reflects deterioration of Ghana’s public finances, which has contributed to a prolonged lack of access to Eurobond markets, in turn leading to a significant decline in external liquidity.

In the absence of new external financing sources, international reserves will fall close to two months of current external payments (debits in the current account) by end-2022, it said.

Portions of the rating said; ”Fitch estimates that Ghana faces USD2.75 billion of external debt servicing in 2022, including amortisation and interest, and USD2.8 billion in 2023. Access to external financing will remain tight, as Ghana is likely to remain locked out of Eurobond markets, which had come to be a regular source of external financing for the government.

In 2022, we expect that the government will meet its external debt obligations, in part, through a combination of a USD750 million term loan from the African Export-Import Bank (BBB), USD250 million in syndicated loans from international commercial banks, and up to USD200 million from the government’s sinking fund. The 2022 mid-year policy review indicates that the government expects to source the rest from the IMF and other multilateral lenders. In the absence of an approved programme by the end of the year, the government would have to draw more heavily on its international reserves, which were USD7.6 billion, including oil funds and encumbered assets, as of June 2022.

Uncertain Pace of Fiscal Consolidation: The government’s high interest costs and low revenue will continue to be impediments to fiscal consolidation efforts. The 2022 Budget’s medium-term fiscal framework had envisaged narrowing the deficit to below the existing deficit ceiling of 5% of GDP by 2024. The expected consolidation was based on the expiry of pandemic-related expenditure items and a significant increase in domestic revenue, driven by new taxes, including a levy on electronic transactions.

Delays in implementing the new revenue measures have resulted in lower revenue and a larger nominal deficit in 1H22 relative to budget forecasts. However, the 2022 mid-year fiscal policy review presented in July contains an updated fiscal deficit forecast of 6.6% of GDP compared with the original deficit forecast of 7.4%, owing to an upward revision in nominal GDP. We forecast the 2022 fiscal deficit at 8.1% of GDP; this is inclusive of energy-sector clean-up costs not contained in the government’s figure. The possibility of new revenue measures could lead to a further shrinkage of deficit in 2023, but the government’s slim majority in parliament could frustrate attempts to raise tax rates or implement new taxes.

Domestic Debt Costs High: Government interest costs reached 47.5% of revenue in 2021, considerably above the current ‘B’ median of 10.7%. We expect interest costs to remain at or above 45% through 2024.

Interest costs largely reflect high yields on domestic debt. Yields have climbed higher in 2022, following inflation spikes and monetary tightening by the Bank of Ghana (BOG). Yields on the 91-day treasury bill reached 26% in July 2022, up from 12.6% in July 2021. Moreover, the government has reported under-subscribed yields, necessitating the tapping of existing medium-term issuance. The government has increased its outstanding advances with the BOG, providing some additional domestic financing and could conduct another private debt placement with the central bank as it did in 2020, but such a measure would necessitate parliamentary approval.”

Read the full details below

https://www.fitchratings.com/research/sovereigns/fitch-downgrades-ghana-to-ccc-10-08-2022?fbclid=IwAR2Lghi45uu0i_6xZCMb5nj1uedG2pCx-LoylL__MTocpCS05jESlGTZox0

By: Rainbowradioonline.com/Ghana

ShareTweetShareShare

Related Posts

ken-ofori-atta-speech-1140x570

Unexpected turnout in DDEP could worsen our economic situation – Ofori-Atta

February 7, 2023
FB_IMG_1675749417340

Claims by GRA that we’re evading taxes and Rambo-style arrests of managers are regrettable – Maxmart

February 7, 2023
GRAA

The law will deal with you ruthlessly if you evade taxes – GRA to business owners

February 2, 2023
Screenshot_20230202-133932

Five branch managers of Koala, Max Mart and The Palace Mall arrested over alleged tax breaches

February 2, 2023
1517931856-18-porkland

Importation of pork from the USA will collapse Ghana’s poultry industry – Association

February 1, 2023
GRAA

Managers of Max Mart, Palace Mall, Second Cup Coffee arrested for bypassing E-VAT System

January 31, 2023

Recent News

Atsu-rescued-1140x570

Turkey Earthquake: Christian Atsu pulled alive from rubble

February 7, 2023
LEQ

Turkey earthquake: Heavy rain hampers rescue efforts

February 7, 2023
ken-ofori-atta-speech-1140x570

Unexpected turnout in DDEP could worsen our economic situation – Ofori-Atta

February 7, 2023
ppq

Polio Vaccine Shortage Hits Greater Accra Region

February 7, 2023
  • Trending
  • Comments
  • Latest
qz

The appreciation of the cedi against the dollar will be short-lived so don’t over jubilate – Haruna to gov’t

December 17, 2022
z455

Bui Power Authority calls for partnership to do more on climate change program at COP27

November 22, 2022

Rainbow Radio expands its platform presence on 92.4Fm in UK

September 5, 2022
zz

Family of Asuma Banda calls on Prez, Mahama, Chief Imam to intervene so their brother is sent to Kintampo

December 7, 2022

Hello world!

Atsu-rescued-1140x570

Turkey Earthquake: Christian Atsu pulled alive from rubble

travel4

Washington prepares for Donald Trump’s big moment

travel1

CS:GO ELeague Major pools and tournament schedule announced

Atsu-rescued-1140x570

Turkey Earthquake: Christian Atsu pulled alive from rubble

February 7, 2023
LEQ

Turkey earthquake: Heavy rain hampers rescue efforts

February 7, 2023
ken-ofori-atta-speech-1140x570

Unexpected turnout in DDEP could worsen our economic situation – Ofori-Atta

February 7, 2023
ppq

Polio Vaccine Shortage Hits Greater Accra Region

February 7, 2023

Stay Connected test

  • 121 Followers
  • 20.2k Followers
  • 185k Subscribers
  • 23.7k Followers
  • 99 Subscribers
Rainbow Radio Online

© 2022 Rainbow Radio International

Navigate Site

  • General News
  • World
  • Sports
  • Business
  • Entertainment
  • Politics
  • Health
  • Opinion
  • Economy
  • Odd News
  • Culture
  • Lifestyle
  • Lifestyle
  • Governance
  • Technology

Follow Us

No Result
View All Result

© 2022 Rainbow Radio International

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Go to mobile version