Consider freezing any rating action amid a pandemic – MoF

Business News for Wednesday, September 16, 2020

Source: goldstreetbusiness.com

2020-09-16

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The Government of Ghana, through the Ministry of Finance, has argued the need for Rating Agencies to reconsider any rating action during global pandemics such as COVID-19.

This follows the downgrade of Ghana’s ratings, by S&P Global Ratings, to B-, although it revised its outlook to stable. This is largely attributed to the impact of the coronavirus outbreak on the country’s fiscal strength, as sovereign debt continues to grow at more than 70 percent of GDP in 2020.

In a statement, the Ministry said: “We therefore call on the Rating Agencies to seriously consider freezing any rating action during global pandemics such as COVID-19. It is very regrettable that rating agencies choose to downgrade our countries in these unprecedented times. “

Ghana spends 50 percent of its budget income on coupon payments. However, the outlook represents S & P’s optimistic forecast of the country’s improvement potential.

S&P Global Ratings also highlighted the significant positive developments in the areas of current account position, accumulation of external reserves and the unprecedented stability observed in interest and exchange rates.

The Ministry indicates that compared to its peers in Ghana, GDP growth remains positive, despite the global crisis.

“Looking ahead, we hope that with the gradual easing of restrictions, the economy will recover quickly and all extraordinary expenses will be eliminated. We have a clear path towards restoring economic stability in the short and medium term. We will sustain our progress and accelerate it through the GH ¢ 100 Billion Ghana CARES transformation program within the general policy framework of Ghana Beyond Aid and certainly beyond the pandemic, ”the Ministry said.

A review of global credit ratings indicates that the downgrade of sovereign credit ratings has affected more than 80 countries and there have been more than 100 negative outlook reviews for this year.

Most of these credit rating downgrades and negative outlook revisions are largely concentrated in countries that previously had B / B2 credit ratings. These adverse rating actions have affected nearly every continent as rating agencies react to the effects of the pandemic on the global economy.