Ghana’s economic outlook has been downgraded by global rating firm, S&P Global Ratings with the country now rated at CCC+/C from its previous B-/B.
Performance of the currency according to S&P Global Rating, portrays a negative outlook “reflecting Ghana’s limited commercial financing options, and constrained external and fiscal buffers”.
Also, S&P alluded to the government’s claim of how the Covid-19 pandemic and the Russia-Ukraine war have caused Ghana’s fiscal imbalances.
In recent times, there has been a higher demand for foreign currency due to so many factors, which include “non-resident outflows from government domestic bond markets, dividend payments to foreign investors and skyrocketing costs for refined petroleum products,” the agency said.
The agency also pointed out that the country has also been affected by the lack of access to Eurobond markets.
Local authorities have passed a levy on electronic transactions and legislation to tighten exemptions on tax payments including VAT, among other moves. “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.
S&P affirmed Ghana’s ratings in February, as Moody’s downgraded the African nation to Caa1 with a stable outlook.