Ghana In Deep Mess as S&P Further Downgrades Country’s Credit Ratings

S&P Global Ratings last Friday downgraded Ghana’s credit rating further to CCC+/C from B-/B.

S&P said its outlook for the country is negative, “reflecting Ghana’s limited commercial financing options, and constrained external and fiscal buffers.”

This new rating further drives a nail into the eroded creditworthiness of Ghana in the eyes of external financiers and investors, as the Akufo-Addo administration overseers the methodical destruction of the Ghanaian economy.

Ghana, like all economies globally had been adversely affected by the Covid-19 pandemic and the conflict in Russia and Ukraine. But before that, rampant mismanagement and corruption in the Akufo-Addo administration had driven Ghana’s public debt to unsustainable levels.

Currently, the total public debt of the country stands at approximately GHC 400 billion with debt-to-GDP hovering around 83%.

Of the public debt, the Akufo-Addo administration alone had accumulated about GHC 300 billion in less than six years. This is more than the combined total of all public debts of the previous administration since independence.

S&P cited the futile introduction of new taxes such as the e-levy to bolster the financial hopelessness in the economy. “While these changes could improve the tax take going forward, the situation remains challenging, and over the first half of 2022, the fiscal deficit has exceeded the government’s ambitious target,” S&P said.

In February, S&P had affirmed Ghana’s ratings but Moody’s downgraded the country’s credit ratings to one of the worst ever, at Caa1.

In February this year, Moody’s downgraded Ghana’s long-term issuer and senior unsecured debt ratings to Caa1 from B3 and changed the outlook to stable from negative.

This is the worst rating ever that Ghana has been given by the rating agency. This will make it extremely difficult for Ghana to source international funds because international investors take such ratings seriously.

Also, even when investors dare lend money to Ghana, either they will do it on the condition of cut-throat collateral or at high-interest rates.

Consequently, the downgrade of Ghana’s debt rating by these agencies is their simple way of saying that if loans are given to Ghana without collateral; the country will very likely not be able to pay back with its debt to GDP ratio of around 85%.

This puts Ghana in a precarious position for global vulture economies like China to advance funds to the country and seize its strategic assets and infrastructures like ports, airports, and other important sovereign installations.

Meanwhile, the Chief Executive Officer of the Alliance for Christian Advocacy-Africa, Rev. Dr. Kwabena Opuni-Frimpong has said that the Ghana Beyond Aid mantra that President Akufo-Addo gleefully proclaimed has become a failed vision.

Rev. Opuni-Frimpkng who is the former General Secretary of the Christian Council of Ghana, says the facts around the economic management of the Akufo-Addo administration have proven that the “Ghana beyond aid” has become mere political sloganeering.

Source: Whatsupnewsghana