S&P downgrades Ghana’s sovereign rating

Oct 29, 2014

Rating agency Standard & Poor’s has downgraded Ghana’s sovereign rating to a “B-“ with a stable outlook. This translated into a fall in the country’s dollar bonds but increased yields, Bloomberg reports.

Rating agency Standard & Poor’s has downgraded Ghana’s sovereign rating to a “B-“ with a stable outlook. This translated into a fall in the country’s dollar bonds but increased yields, Bloomberg reports.

This rating is six levels below investment grade and is the consequence of a 10 per cent budget deficit.

Gareth Brickman, of
ETM Analytics Africa, told Bloomberg: “S&P shares our skepticism over whether the government would be able to credibly implement reform even if a financial aid deal were sealed in coming months”.

Indeed, Standard & Poor’s lowered Ghana’s rating despite ongoing talks between the country and the International Monetary Fund. An agreement could help stabilise the Ghana economy, which has been growing for the past few years thanks to its export of cocoa, gold and oil.

However, the income from these exports has decreased as the price of cocoa and gold fell, with sharp consequences for the second largest cocoa producer in the world.

Ghana, alongside the Democratic Republic of Congo and Egypt, is now one of the worse rated countries in Africa.ADNFCR-2976-ID-801757325-ADNFCR