- Fitch, an international rating agency has predicted a slowdown in the power sectors of several sub-Saharan countries, including Ghana
- The agency revealed that the slowdown could be attributed to the coronavirus which has affected several economies
- It indicated that the outbreak could lead to lesser revenue from exports as well as weakened currencies
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International rating agency, Fitch, has predicted a slowdown in the power sectors of a number of sub-Saharan countries, including Ghana.
Fitch explained that the slowdown is a possible result of the outbreak of the coronavirus which has been reported in several countries all over the world.
It explained that the slowdown is a possibility because a fall in economic activity leads to lesser export revenues as well as weakened local currencies.
READ ALSO: Latest Fitch report shows the coronavirus may cause a fall in Ghana's growth rate
Per a report by classfmonline.com, it added that “as economic growth in the region slows or even contracts, this will negatively impact on the scope for investment in new power projects, and holds the risk of stalling governments' drive to increase electrification rates.”
Fitch further indicated that the collapse in oil prices and the price war between Saudi Arabia and Russia would lead to enhancing the slowdown in markets that rely on oil exports for revenues.
This, they revealed, is highly likely, given the possibility of a deadlock in a resolution between the two countries.
Fitch went ahead to note that it is likely non-hydropower renewable projects across sub-Saharan Africa will face an increased risk of delays as they rely heavily on imported components whose supply chains have slowed down or even completely stopped.
It expressed a conviction that South Africa and Nigeria are particularly vulnerable to the detrimental economic effects of COVID-19, and this would create a more pronounced risk for their power sectors and plans for expansion.
Meanwhile, Fitch has indicated that the economies of eight African countries will be negatively affected by the outbreak of the coronavirus.
Fitch listed the countries as Ghana, Angola, Congo, Equatorial Guinea, Zambia, South Africa, Gabon, and Nigeria.
According to the agency, the coronavirus will have a downside risk for a number of sub-Saharan countries including those listed above.
The risks are associated with the short-term growth outlook due to the outbreak of the virus in China.
READ ALSO: Goldman Sachs predicts sub-Saharan Africa could need $75 billion to battle COVID-19
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