This government does not listen – Bright Simons reacts to S&P CCC+ rating

Vice President of IMANI Africa, Bright Simons, has berated the government for the last downgrade of Ghana’s credit ratings by Standard and Poor's (S&P) Global Ratings.

In a tweet shared on Friday, August 6, 2022, Simons said that the government failed to listen to experts who advised that it cuts its expenditure drastically because of the

Read full articleliquidity challenges it is facing.

He added that the failure of the government to show the international committee that it is ready to live within its means is the reason why the country has been downgraded again which will further worsen the current economic hardship.

“The govt of Ghana was told that if it failed to signal more forcefully to the market its intentions to aggressive fiscal consolidation, such conduct will trigger another downgrade. So sad that it refused to listen. As usual,” parts of the tweets Simon shared read.

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.

In January 2022, Fitch Ratings downgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from ‘B’ to ‘-B’ with a negative outlook; on February 4, 2022, Moody’s also downgraded both Ghana’s Long-Term Issuer and Senior Unsecured Bond Ratings to Caa1 with a stable outlook from B3. Standard and Poor’s, however, maintained Ghana’s credit rating at a B – with a stable outlook.

View Simon's tweet below:

https://t.co/jLfSKSOwJ4

A bit more perspective on the rating action. ????????‍♂️

— Bright Simons (@BBSimons) August 5, 2022