Ghana hoping to change credit rating downgrades with IMF programme

Ghana’s economy moved from ‘B’ to ‘B-’ with a negative outlook

The country is seeking an IMF bailout

IMF bailout might help Ghana get favourable ratings, Jermaine Leonard

Ghana is hoping to change its credit rating downgrades from three credit rating agencies, Moody’s Investor Services, Fitch Ratings and Standards & Poor’s with a possible IMF programme.

The country’s economy moved from ‘B’ to 'B-' with a negative outlook according to Fitch Ratings and Standard & Poor’s.

The downgrades by the rating agencies are as a result of the surge in public debt and inadequate tax revenues to service interest payments.

According to the Director at Fitch Ratings Sovereign and Lead Analyst for Ghana and Zambia, Jermaine Leonard, with the government of Ghana currently in talks with the IMF over a possible bailout, Ghana is expected to earn a good rating from the crediting agencies in their next rating actions.

Also, a reduction in the country’s current debt levels will play a major role in getting a favourable rating by the agencies.

“On the positive side what things will lead to stabilisation of the rating; a resumption of access to the international capital market will be a big one and that will come from an IMF programme or a change in investor sentiments”, he pointed out in an interview monitored by Ghanaian Times.

Representatives of the IMF arrived in the country to begin negotiations with the government following its decision to seek a bailout.

Ghana is expected to seek as much as $1.5 billion from the International Monetary Fund.

JEA/FNOQ