S&P downgrade: Ghana's financial position at higher risk - Theo Acheampong

Economist and Political Risk Analyst, Dr. Theo Acheampong has said the recent downgrade of Ghana’s economy by S&P Global Ratings puts the country’s financial standing at a higher risk.

S&P global rating on August 5, 2022, revised Ghana’s credit rating from B-/B to CCC+/C with a negative outlook.

Dr. Acheampong reacting to the development said government’s decision to

Read full articleseek financial bailout from the International Monetary Fund must be hastened in order to restore investor confidence in the country.

“What this really has done is that it has made the financing landscape of the country even more challenging because the country’s debt has been pretty much put into a speculative trajectory. And we are only one step below being classified or as being in default in that regard,” he said on Accra-based Joy FM.

“So, the financing landscape has become extremely challenging or limiting for the government; the deficit and the debt is rising amidst all the follow-on-effect of the pandemic and the war in Ukraine, it does mean that things are going to be challenging”, he stressed.

Earlier this year when ratings agency, Fitch and Moody’s downgraded the country’s credit rating, S&P maintained its rating at B-/B, however, Dr. Acheampong noted that the ratings had to be revised after the government’s tax measures failed to rake in the expected revenue.

“If you recall S&P earlier in the year decided not to downgrade Ghana when the two other rating agencies i.e. Fitch and Moody’s had done so. And they [S&P] said that with the expectation that some of the new revenue measures, E-levy, and additional collections will come through.”

“But half year through the year, what we’ve seen actually is that the E-Levy is underperforming and collecting 10% of the intended target”, he added.

SSD/MA