S&P Global Ratings lowered its long-term foreign- and local-currency sovereign credit ratings on Ghana to B- from B on mounting fiscal challenges in the wake of the COVID-19 pandemic.
The outlook is stable, which balances risks from fiscal and external financing pressures on the country's strong medium-term economic growth prospects.
The COVID-19 pandemic will exacerbate Ghana's fiscal challenges, with government debt increasing to over 70% of GDP in 2020 and interest payments consuming half of fiscal revenue.
Weaker tax revenue and slow economic activity are expected to widen the government's fiscal deficit to about 13.5%, which is one of the weakest levels among rated sovereigns in Africa, the rating agency said.
The rating agency also affirmed the B short-term ratings on the sovereign and revised down the transfer and convertibility assessment to B from B+. The ratings are supported by Ghana's strong growth prospects and flexible exchange-rate regime, balanced against weak external dynamics and public finances, as well as low GDP per capita.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.