Ghana under pressure from credit rating agencies

In this period of crisis, the three main international financial rating agencies (Standard & Poor’s, Moody’s and Fitch) have their eyes fixed on the evolution of the Ghanaian economy.

After Fitch Rating, which downgraded Ghana’s sovereign rating twice in a row, it’s up to Moody’s to enter the dance. The rating agency announced on Monday (October 3rd) that it had lowered the West African country’s rating to Caa2, and now classifies it in the “ultra speculative” high-risk category.

Moody’s notes that this deterioration is attributed to the country’s economic situation where the main macroeconomic indicators (GDP, inflation, trade balance, exchange rate, etc.) are red.

The institution indicated that if Ghana is not careful, this situation will have disastrous consequences on its economy, leading above all to a debt crisis and a risk of default.

The agency pointed out that even if the monetary authorities are in the process of raising the interest rate to contain inflation and have answers on macroeconomic stability, there are still many things to do. It aligns itself behind certain specialists who believe that the second largest gold producer in Africa must imperatively approach the International Monetary Fund (IMF) to find suitable solutions.

According to experts, the Bretton Woods institution will imminently recommend that Ghana restructure its debt, which is becoming increasingly unsustainable.

According to official statistics, the debt continues to grow in the face of galloping inflation and the depreciation of the local currency. According to the latest estimates, it reached 78% of gross domestic product (GDP) once morest 62.5% five years ago.