The Government has expressed its dissatisfaction with the Standard and Poor’s (“S&P”) Global Ratings for its recent downgrade of Ghana’s foreign and local currency credit ratings from ‘B-/B’ to ‘CCC+/C’ with a negative outlook.
The decision for the downgrade was mainly attributed to the intensifying financing and external pressures on the economy.
The Rating agency had considered the country’s elevated gross financing needs in the face of International Capital Market hiatus; limited commercial financing options; credible steps taken by Government to fast-track fiscal consolidation and the passage of key revenue bills.
The assessment also considered the country’s consequent fiscal and external imbalances caused by the lingering effects of COVID-19 pandemic and the Russian invasion of Ukraine on Ghana.
According to the Ministry of Finance, the assessment failed to consider government’s economic interventions implemented in 2022, which were affected by global shocks.
“The Government is disappointed by S&P’s decision to downgrade Ghana despite the bold policies implemented in 2022 to address macro fiscal challenges and debt sustainability, which have been significantly exacerbated by the impact of these global external shocks on the economy” a statement released by the Ministry noted.
The Ministry, however, assured that government would continue to be proactive in addressing the external and domestic headwinds of the economy and its impact on livelihoods of Ghanaians as all the revenue measures introduced in the 2022 Budget had been promulgated by Parliament.
“Government has implemented key revenue and expenditure measures, including the 30% cut in discretionary expenditures.
“The delays in the passage of key revenue measures introduced in the 2022 Budget affected revenues performance in the first half of the year,” the statement noted
It said engagements with the International Monetary Fund (IMF) for a Programme was expected to support the drive to restore and sustain macroeconomic stability; debt sustainability and promote growth and job creation whilst ensuring social protection.
“The Government is committed and is confident that it will successfully emerge from these challenges in the shortest possible time as we have demonstrated the track record to do so in the Akufo-Addo led Government.”