S&P will downgrade Ghana to ‘D’ by the end of March 2023 – Ato Forson predicts

The Ranking Member of Parliament Select Committee on Finance, Cassiel Ato Forson, has predicted that credit rating agency, Standard and Poor's (S&P) Global Ratings, will downgrade Ghana to a ‘D’ rating before the end of the first quarter of 2023.

Ato Forson, who said this while reacting to the S&P's latest downgrade

Read full articleof Ghana’s credit ratings to a CCC+/C, indicated that the worse is yet to come.

He asserted that Ghana will be downgraded further to a 'D' rating because of a debt restructuring programme - Heavily Indebted Poor Countries (HIPC) – it will be undergoing next year.

“S & P Rating Agency may have no option than to downgrade Ghana to D by the end of the First quarter 2023 in anticipation of a debt restructuring (“HIPC” phase 2 ) programme next year! May God help us all!” a tweet shared by Ato Forson, who is also the Member of Parliament for Ajumako Enyan Esiam.

On Friday, August 5, 2022, S&P, an American credit rating agency, pushed Ghana's debt further into speculative territory, lowering its foreign and local currency sovereign ratings to CCC+/C from B-/B.

According to a report by marketwatch.com, S&P said its outlook for the country remains negative, "reflecting Ghana's limited commercial financing options, and constrained external and fiscal buffers."

S&P which is one of the ‘Big Three’ credit-rating agencies, including Moody's Investors Service and Fitch Ratings, in their report stated that the “COVID-19 pandemic and the conflict in Russia have magnified Ghana's fiscal and external imbalances.”

The CCC+/C rating implies that Ghana is considered a “junk” country in terms of investment and any investor who buys a bond issued by the government of Ghana is at a high risk of not getting his/her investment.

A “D” rating, in addition to Ghana, is a “junk” country, also implies that Ghana is already defaulting on its debts.

Ato Forson in January 2021 rightly predicted that S&P will downgrade Ghana’s credit rating to a CCC rating when Fitch Ratings downgraded the country's rating to a B-.

“This (B- rating) is the clearest indication of the mess this government’s economic mismanagement has brought upon Us! S&P and Moody’s are yet to release their report! There’s a possibility of CCC rating soon!” a tweet the MP shared in January read.

View the MP's tweet below:

S & P Rating Agency may have no option than to downgrade Ghana to D by the end of the First quarter 2023 in anticipation of a debt restructuring ( “HIPC” phase 2 ) programme next year! May God help us all! pic.twitter.com/BTdVvUfZnf

— Cassiel Ato Forson(PhD) (@Cassielforson) August 6, 2022