S&P lowers Ghana's sovereign rating

Aug 31, 2010

Standard & Poor's (S&P) has lowered Ghana's sovereign rating after raising concerns about the "large fiscal deficits" of the country's government.

The agency said it is decreasing the nation's foreign currency and local currency long-term sovereign credit ratings from 'B+' to 'B', while also moving its transfer and convertibility assessment down to 'B+'. In a statement, Credit Analyst at the firm Ravi Bhatia noted Ghana is currently experiencing high levels of debt and has "substantial" supplier arrears, while many state-owned enterprises are making a loss. "In addition, there are concerns over a lack of clarity in oil sector regulation and in the management of the government's oil revenues," he remarked.

However, S&P described the outlook for the country as "stable", stating it expects economic reforms currently taking place to continue. Speaking after the move, Ghana's Deputy Finance Minister Seth Terkper said in an interview with Bloomberg that the country is on track to bring its budget deficit down to 7.5 per cent of gross domestic product by the end of 2010.