Sovereign Africa Ratings (SAR), an African ratings agency licensed by the Financial Sector Conduct Authority (FSCA) has released a credit rating report on the Republic of Ghana.

According to SAR’s report “Ghana still faces significant fiscal challenges. The economy is experiencing instability, as the real GDP growth is expected to remain subdued (3.22% in 2022 from 5.4% in 2021), along with high inflation (31% in 2022 from 9.97% in 2021).”

“Ghana is still experiencing elevated debt levels and limited access to international capital markets and its economy continues to display a significant reliance on primary commodity exports, including gold, cocoa, and oil. This fundamental dependence leaves the country susceptible to global economic downturns and fluctuations in commodity prices. In April 2023, Ghana experienced payment delays on certain local-currency-denominated bonds that had not been tendered or were held by entities ineligible to participate in the domestic debt exchange programme completed on February 24, 2023. Hence Ghana remains at risk of further defaults and continues to struggle to meet its obligations,” says the SAR report.

Zwelibanzi Maziya, SAR’s Chief Operating Officer, says as per SAR’s philosophy, the plurality of creditworthiness opinions remains crucial for emerging markets.

“With Ghana being Africa’s leading gold producer, as well as producing other commodities including cocoa, oil and timber, its natural resource wealth cannot be disputed. However, challenges relating to effective fiscal management, among others, have led to Ghana’s default on its external debt payments. Sovereign Africa Ratings therefore issued an objective opinion on Ghana wherein the significance of this assessment is in noting the country’s challenges and opportunities, as well as the inclusion of rating sensitivities which highlight factors that can lead to the improvement of Ghana’s creditworthiness,” adds Maziya.

Key insights from the report include that Ghana has commenced debt restructuring in an effort to manage its debt. During this year, Ghana recorded an overall budget deficit of 3.0% of its gross domestic product (GDP).

“We continue to monitor developments on the domestic front and will be vigilant of the risks associated with Ghana’s commitments to its creditors and other external parties”, says David Mosaka, SAR’s Chief Ratings Officer.

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