Ghana’s credit worthiness has moved a notch further, a clear indication of gains made since the implementation of home grown policies began in 2014. The latest confirmation is captured in a statement released by International credit rating agency MOODY’s which gave Ghana a B3, changing the outlook from negative to stable.
The statement which follows recent assessment reports by the World Bank and the International Monetary Fund reaffirms assurances by Finance Minister, Seth Tekper and President John Mahama in response to critics, who have consistently painted a gloomy picture for political expedience.
MOODY’s rating is expected to bolster investor confidence in the economy, which suffered major setbacks since government began implementing its home-grown policies consolidated by the IMF programme.
For nearly three years, President Mahama’s government grappled with how to end the power crisis that virtually grinded the business sector to a halt, reduced significantly the huge budget deficit brought about as a result of the huge public sector wage bill following the implementation of the Single Spine Pay Policy and managed to stabilize the cedi against the dollar.
These were captured in MOODY’s report which identified three key drivers that informed its decision to revise the outlook.
First is the "significant deficit reduction and institutional reform implementation over the past year.
The second driver according to the report is the "Reduced government liquidity risk on the external side after the successful issuance of a recent $750 million Eurobond in earmarked to redeem the remaining $400 million October 2017 Eurobond maturity"
A statement issued by the Ministry of Finance attributed the third reason is the improved balance of payment dynamics, amid continued development of oil and gas resources through higher foreign direct investment inflow, supporting reserve buffers and reduced currency volatility.
In the report, Moody’s highlighted Ghana’s ongoing fiscal consolidation and strong fiscal discipline as credit positives, commitment to that level of prudence was recently codified into law via the Public Financial Management Law (PFML).
MOODY’s latest release exonerates Finance Minister, Seth Tekper and President John Mahama’s assurances to the business community especially over the last few months.
Last month, when President John Mahama addressed the Ghana Club 100 Awards ceremony, he disclosed a significant drop in the debt to GDP ratio from 72 percent at the end of 2015 to 63 percent at the end of May 2016.
Government has also announced that Budget deficit which stood at 12 percent in 2013 has also been brought down significantly and is projected to drop further to about 5 percent while Ghana’s growth is expected to end the year at 5 percent and hit over 8 percent next year.
Moody’s report comes at a time when opposition elements tried to undermine prudent measures that analysts say have resulted in a stabilized cedi, reduced inflation, improvement in power crisis and massive infrastructure projects in the roads, ports, health and education sectors.
Ghana recorded a successful Eurobond issuance of, priced competitively at 9.25 per cent in September 2016.
The over subscription of the US$750 million Eurobond to the tune of four (4) billion dollars is a clear demonstration of confidence from the global investor community in the consolidation of Ghana’s turnaround story,” he said.
Moody’s has also praised Ghana’s prudent debt management strategy, including the decision to utilise proceeds from the recent Eurobond to redeem upcoming external debt maturities, reducing rollover risks.
The stable outlook confirms government’s position that the trend in economic performance will prevail at least over the 12 to 18 months.
Source: Peacefmonline
Disclaimer: Opinions expressed here are those of the writers and do not reflect those of Peacefmonline.com. Peacefmonline.com accepts no responsibility legal or otherwise for their accuracy of content. Please report any inappropriate content to us, and we will evaluate it as a matter of priority. |
This is not tru. Its a lie. Ghana's economy is collapsing. Moody's n IMF are all liars. We need better ppl to fun our economy properly
No? Then 🤐!
This whole international so called rating agencies vultures are a complete FRAUD and just a marketing tool to sell loans to economically weak nations like Ghana ; the facts are that all our economic indicators show complete negative progression on the ground ; the figures on key economic indicators show that the economy is failing fast ; the lastest GDP figures show a down turn ;inflation is 17.8%; interest rate 35%; deficit around GHC110 bn; government gearing is very high ; unemployment very high ; ability to apply macro-economic policies like tax collection is very poor ; economy dependent on risky unstable oil exports and commodity prices ; so how on earth did this MOODY's rate the Ghana economy ; has Jon Mahama ebola virus of giving bribes or 'NOKOFIO' to the IMF and officials in these ratings making the rounds in the financial markets ; these agencies are just selling debt through Jon Mahama to Ghanaians and taking their cuts ; frankly Ghana we are in big trouble besides your ability to pay lenders are not legitimate grounds to fall into this borrowing loop or circle ; what happens if you are not able to pay one day ; then you are stuck ;this a very lazy way of managing the economy and where from this stoooooopid idea that Ghana is managing its debt stock well because using debt to redeem debt without finding ways to develop your industry assets and create jobs is the worse economic management initiative you can pursue ; we are just been fulled by these agencies !!!!!!!!! .
he who feels it knows it. what is this moody talking about. they do know what is happening in our system? i will not be surprised the ndc paid bribe to some top individuals at moody's to get an upgrade in an election year. moody should give us the economic figures and numbers to enable us make an informed decision ourselves. t-h-i-e-v-e-s and l-i-a-r-s!
God bless our homeland Ghana and Make our nation great and strong to the glory of God and to the pains of the nation's wreckers. JM, TOASO JM, TSANOR JM, MO TSANOR JM, CONTINUE
Who doesn't know the NDC has seen this so called rating institution behind closed doors..?? You (MOODY) dance to the tune of this corrupt administration..IF you want give them A++ we (Ghanaians) will still vote them out of power..! You think you were offering them ropes to cling on, but let me assure you, it has FAILED! We don't need your ratings and metrics..This is Africa, we don't need the white ape to interfere in our affairs. [email protected]