Ghana's economy graded 'B' by Fitch

Ghana's economy graded 'B' by Fitch

Ghana's Long-Term Foreign-Currency Issuer Default Rating (IDR) has been maintained at 'B' by rating agency, Fitch.

The latest grading, published on its website on Monday, 18 March 2018, puts Ghana two levels below investment grade.

The global rating agency took into consideration a strong medium-term growth potential and strong governance indicators relative to peers.

Ghana's economy graded 'B' by Fitch

Ghana's Finance Minister, Ken Ofori Atta. Source: Classfmonline.com
Source: UGC

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Other indicators cited include balance against worsening external liquidity, a weak banking sector and high debt levels.

According to Fitch, Ghana has been “unable to significantly raise domestic revenue through tax administration reforms and adjustments.”

It added that “the country's record of sizeable fiscal slippages in the election years of 2012 and 2016, implies there are downside risks ahead of the 2020 general elections.”

The US firm also forecasts that the “government debt will fall in 2019, to 58% of GDP, but high debt servicing costs and currency depreciation will keep debt above 50% of GDP in the medium term.”

Meanwhile, Standards and Poor's (S&P) Global, another rating agency, also maintained its 'B/B' long- and short-term foreign and local sovereign credit ratings for Ghana.

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The Ghana government recently acquired a US$3 billion Eurobond to shore up revenue for budget expenditure.

The bond is also meant for the payment of maturing notes which the government intends to use to salvage the depreciating cedi.

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Source: Yen

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