Return to Capital Market to take 2-3 years; Gov’t to use period to work on “junk status” rating – Ken Ofori-Atta
Ghana’s return to the capital markets to acres long term loans will take some two to three years according to the Minister for Finance, Ken Ofori-Atta.
The Finance Minister, speaking at a press briefing on Wednesday, September 28, noted the government will use the two to three year waiting period to work on the economy so as to get more favourable ratings from the three traditional credit rating agencies – Moody’s, Fitch and S&P.
“Once we got downgraded to triple C, we are also expecting that economic programme that is being worked on which will be the basis for the IMF discussions would help us to come back to some strong matrices so that we will be able to get some ratings revised over that period.
“We are confident that returning some sort of access to the capital markets is going to take some time, two to three years and so during that period we will work on our ratings also to be able to get back,” he noted.
Expressing disappointment over the recent downgrade of Ghana’s Long Term IDR to “CC” by Fitch Ratings, the Finance Minister averred the rating action further depresses the country’s bonds on the international market.
“The issue of Fitch downgrade is unfortunate. In their email to us, they referred to the Bloomberg article that influenced their decision. It sort of further depresses the bonds on the international market and results in additional losses to investors,” he remarked.
This is the second time in 2022 that the rating agency has downgraded Ghana’s creditworthiness.
The “CC” downgrade by Fitch Ratings reflects the increased the increased likelihood that Ghana will pursue a debt restructuring given mounting financing stress, with surging interest costs on domestic debt and a prolonged lack of access to Eurobond markets.
Meanwhile, the Finance Minister has stated that negotiations with the IMF for a programme will be fast-tracked to ensure that key aspects of the programme are reflected in the 2023 Budget Statement.
“The formal negotiations for a Fund-supported programme began on Monday September 26th, 2022 and discussions are advancing smoothly.
“The IMF Mission will cover a period of 10 days; and in line with the president’s dialogue with the IMF managing director, Kristalina Georgieva, negotiations will be fast-tracked to ensure that key aspects of the programme are reflected in the 2023 Annual Budget Statement in November 2022”
“Government is committed to ensuring that a comprehensive package is negotiated with the aim of restoring and sustaining macroeconomic stability, ensuring durable and inclusive growth and promoting social protection,” the Minister stated.
The 2023 Budget Statement is expected to be presented to Parliament in November this year.
