Moody’s cuts Ghana’s sovereign rating to negative

Moody’s has lowered Ghana’s B1 sovereign rating from stable to negative, the agency announced December 5, 2013.

The cut down of the country’s sovereign rating, according to Moody’s, was due to the Ghanaian government’s “weak fiscal fundamentals and rising debt levels, which reflect both continued spending overruns and relatively low revenue ratios compared with rating peers, despite rapid growth”.

In a statement, Moody’s added that “the weakening of Ghana’s external position on the back of large external imbalances and a low level of foreign-exchange reserves, which have increased the country’s susceptibility to event risk in view of the strong correlation between domestic economic activity and the global business and commodity cycles”.

Concurrently, Moody’s has affirmed the government’s B1 issuer and bond ratings.

By Ekow Quandzie