Accra, September 17, 2018 - Standard and Poor’s (S&P) at the end of their recent assessment of the country, has upgraded Ghana to B with a stable outlook from B- with a negative outlook, thus, Ghana has achieved a credit upgrade for the first time in almost a decade.
This achievement has come about with strong efforts in monetary and fiscal policies; Debt dynamics declined significantly for the first time in almost a decade, the primary balance recorded a surplus for the first time in almost a decade and a successful issuance of bonds at international markets during a global economic downturn.
“Congratulations to the Management and staff of the Ministry and its agencies. Going forward, investors are upbeat about the progress. We need to sustain the progress made so far and not derail in our efforts.” Ken Ofori-Atta, Minister for Finance remarked on hearing the news of the credit upgrade.
Sovereign credit ratings are a key evaluation principle for a country’s economic and political environment, which gives investors insight into the level of risk associated with investing in a particular country.
The implications of a credit rating upgrade include;
- Sourcing for funds on the international capital market would be cheaper;
- Commitment to transparency in political and economic development; and
- Possibility of increased foreign direct investment.
“The upgrade reflects our assessment that Ghana’s monetary effectiveness has improved, albeit from a low base, and will support the credibility of the inflation-targeting framework over the period” the S&P report noted.
The report continued that “the stable outlook balances Ghana’s fairly robust growth prospects, decreasing inflation, and narrower current account deficits against risks from still-high budget deficits and high stock of public sector debt”
Working towards this upgrade had been an illusion for almost a decade. Economic downturns and volatility in outcomes had persisted for sometime, while public debt dynamics increased consistently since 2006.
S&P has been rating Ghana since 2003. At the time, Ghana achieved a B+ with a stable outlook. Ghana maintained this rating bill till December 2008 when Ghana’s stable outlook was revised downward to a negative position.
Ghana is rated by three rating agencies, Fitch Ratings, Moody’s and Standard and Poor’s. To support the evaluation process, Standard Chartered Bank provides advisory services for Ghana to the rating activities. END
PUBLIC RELATIONS UNIT, MINISTRY OF FINANCE
THE NEWS EDITOR