Credit rating agency, Moody’s Investor Services, says its review of Ghana’s credit profile reflects economic strength balanced by strong growth potential against small scale and low but growing wealth levels.
Moody’s in its review noted the country’s institutions and governance strength reflect an improved fiscal governance framework also balanced by recurring revenue underperformance against budgeted targets.
It however expressed concern about the elevated debt burden in addition to the prospect of further contingent liabilities or possible obligation materializing in the energy sector, whose debt is close to a billion dollars.
“The credit profile of Ghana (issuer rating B3) reflects “ba2” economic strength, which balances strong growth potential against small scale and low but growing wealth levels; “ba3” institutions and governance strength, reflecting an improved fiscal governance framework, balanced by recurring revenue underperformance against budgeted targets; “caa3” fiscal strength reflects the elevated debt burden and weak debt affordability metrics in addition to the prospect of further contingent liabilities materializing in the energy sector,” said Moody’s.
The US based international ratings agency also highlighted the country’s exposure to international capital flow reversals leading to exchange rate instability and high borrowing costs, stressing ”b” reflects susceptibility to event risk driven by government liquidity, highlighting the country’s exposure to international capital flow reversals leading to exchange rate volatility and to high borrowing costs.”
The international ratings agency’s review of the country’s credit profile comes on the back of the Ghana’s ability to raise between $3 billion – $5 billion on the international capital market this year.
The assessment, Moody’s however notes, is not subject to a credit rating action of Ghana’s creditworthiness.
