The Ministry of Finance asserted here on Monday that strong efforts at monetary policy and fiscal management were responsible for the upgrading of Ghana by global credit referencing house Standard and Poor(S&P).
A release issued here to explain what led to the upgrading stressed that “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.”
It added that the country had also been successful in the issuance of bonds on international markets during a global economic downturn.
At the end of its latest assessment, the credit rating agency announced its decision to upgrade the West African country to B rating with a stable outlook.
It explained that the upgrade reflected their assessment that Ghana’s monetary effectiveness had improved, albeit from a low base, and would support the credibility of the inflation-targeting framework over the period.
Credit rating forms part of the key evaluation principles 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 stable outlook, according to S&P, 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.
“Congratulations to the management and staff of the ministry and its agencies. Going forward, investors are upbeat about the progress,” Ken Ofori-Atta, Minister for Finance, commented.
He added: “We need to sustain the progress made so far and not derail our efforts.”
The release noted that working towards this upgrade had been an illusion for almost a decade. Economic downturns and volatility in outcomes had persisted for some time, while public debt dynamics increased consistently since 2006.
Two other agencies, Moody’s and Fitch Ratings also assess Ghana periodically.
Similarly, in September 2016, Moody upgraded Ghana to B3 with a stable outlook. Enditem