Fitch puts Ghana’s credit ratings at B+ above S&P’s B
Fitch Ratings, one of the world’s credit ratings agencies has raised Ghana’s long-term issuer default ratings to B+ negating Standard & Poor’s B.
In August this year, Standard & Poor’s lowered Ghana’s credit ratings from B+ to B citing lack of clarity in the country’s oil sector, the management of government’s oil revenues as well as the large fiscal deficit. And the news drew critical responses from financial analysts in the country and abroad, including the International Monetary Fund (IMF).
The IMF said the downgrade of Ghana’s credit ratings was questionable and based on wrong information.
Mohamad Jafar Mujarrad, IMF Executive Director responsible for Ghana, told the media in Accra that on the contrary all data showed that Ghana’s economy was stabilising.
“The overall economic climate is satisfactory. Inflation is coming down and the prospects for growth are positive,” Mr Mujarrad said.
The Fitch Ratings outlook coming one month after the S&P’s ratings said tight fiscal and monetary policy, as well as the use of funding from the IMF, has stabilized Ghana’s economy.
Ghana’s inflation has been spiralling, reaching 9.46% in July 2010 , down on the June 2010 rate of 9.52% and then marginally down to 9.44% for August 2010, and the country’s deficit has narrowed 8% of GDP in 2009 from 21% in 2008.
According to Fitch, Ghana’s declining inflation rate has eased government borrowing. It also said the country’s budget deficit has declined to 10% from 14.5% in 2008.
Fitch, however, said Ghana’s ratings could face downward pressure if the government returns to “fiscal mismanagement.”
Ghana’s economy is expected to grow above 2009 levels of 5% to 5.7% in 2010. The Vice President John Mahama said the growth is projected on the prospects of the country’s oil production expected to begin this year and global economic recovery.
Commercial production of oil has been scheduled for November or December 2010, and economic activity is expected to centre around oil and gas.
By Emmanuel K. Dogbevi