- An international rating agency, Moody's, has downgraded Ghana’s economic outlook from positive to negative
- However, Ghana's long-term local and foreign currency issuer and foreign currency senior unsecured bond ratings were maintained at B3
- The outbreak of the coronavirus has been singled out as the reason for the downgrade
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YEN.com.gh has learned that Moody’s, an international rating agency, has downgraded Ghana’s economic outlook from positive to negative.
The firm, however, maintained the country’s long-term local and foreign currency issuer and foreign currency senior unsecured bond ratings at B3.
Information available shows that the outbreak of the coronavirus is a key reason for the downgrade.
READ ALSO: COVID-19: Fitch predicts a possible slowdown in Ghana's power sector
The COVID-19 has also resulted in a significant decrease in tax revenue and increased the chances of systematic risks.
According to a report by classfmnoline.com, Moody’s changed Ghana's sovereign ratings from stable to positive only in January 2020.
Moody’s report explained that the agency’s decision was fuelled by the rising risks following the outbreak of the coronavirus.
It added that Ghana is particularly vulnerable to these shocks as a result of its high reliance on external financing, both local and in foreign currency, as well as very weak debt affordability.
Moody’s, however, projects that Ghana’s ability to survive the crisis could lead to a boost in its profile.
With estimated gross borrowing needs of 15-20% of GDP, Ghana is acutely exposed to the tightening of external and domestic funding conditions in the wake of the coronavirus outbreak.
Meanwhile, international rating agency, Fitch, has predicted that Ghana’s growth rate is likely to fall from 6.5% to 6.2%.
The 0.3% fall in the growth rate has been attributed to the effects of the coronavirus on the economy.
Fitch explained that it, therefore, expects the real Gross Domestic Product (GDP) to also expand by 6.2%.
Fitch’s analysed the impact of the coronavirus on sub-Saharan economies and concluded that Africa’s oil producers countries could record reduced growths and export earnings.
READ ALSO: COVID-19: Fitch predicts Ghana and 7 other African economies are at risk
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