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Moody’s changes Ghana outlook to positive from stable, affirms B3 rating

Yesterday January 24, 2019, Moody’s Investors Service issued a statement on Ghana noting that it has affirmed the government’s long-term issuer and seniour unsecured bond ratings at B3 and changed the outlook to positive from stable.

Moody’s also concurrently affirmed the rating of the bond enhanced by a partial guarantee from the International Development Association (IDA, Aaa stable) at B1.

According to the statement, the decision to assign a positive outlook reflects Moody’s rising confidence that the country’s institutions and policy settings will foster improved macroeconomic and fiscal stability over the medium term, acknowledging that the recent IMF reform programme for the country has had some positive impacts.

“Those reforms are beginning to bear fruit, as seen for example in the return to primary fiscal surpluses, measures to smooth the debt maturity profile and increasingly sustainable growth prospects,” it said.

Moody’s however, points out that pressures and risks remain, as evidenced by persistent revenue challenges, a potential repeat of pre-election fiscal cycles, and the emergence of significant arrears and further contingent liabilities in the energy sector, all contributing to rising public debt.

“The positive outlook reflects increasing confidence that the government will manage those pressures in such a way as to sustain and enhance external and fiscal stability,” it added.

By Emmanuel K. Dogbevi

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