International Credit Ratings Agency, Moody’s has revised the outlook on Ghana’s Long Term Bond Ratings from Negative to Stable.
The rating agency has also affirmed the rating at B31.
Moody’s cited significant fiscal deficit reduction and success in implementing structural reforms over the past year as well as reduced government liquidity risk on the external side following the issuance of the US$750m Eurobond, the proceeds of which are earmarked for debt repayments as some of the key drivers for the stabilization of the rating.
Other reasons cited for the revision were improved balance of payments dynamics, including improved FDI inflows and continued development of oil and gas resources.
Moody’s since March 2015 has rated Ghana at B3/ Negative Outlook.
A statement from the Finance Ministry said ‘this positive action comes at a time of improving macroeconomic and fiscal indicators and follows our recent successful Eurobond issuance of US$750mn, priced competitively at 9.25%, in September 2016.
This issuance marked the Eurobond from Sub-Saharan Africa (ex RSA) in 2016 and, demonstrates confidence from the global investor community in the consolidation of Ghana’s turnaround story’.
The statement also added that Moody’s in its report had highlighted Ghana’s ongoing fiscal consolidation and strong fiscal discipline as credit positives.
‘Commitment to this level of prudence was recently codified into law via the Public Financial Management Law.
Moody’s also praised Ghana’s prudent debt management strategy including the decision to utilise proceeds of the recent Eurobond to redeem upcoming external debt maturities, reducing rollover risks.
The Stable Outlook reflects Moody’s view that the reforms adopted by the Government will remain in place and continue to deliver improved economic performance over the next 12 – 18 months.
Together with the successful bond issuance, this rating action demonstrates the increasing confidence of international markets stakeholders in Ghana’s turnaround story. Ghana is also rated by Standard & Poor’s and Fitch Ratings at B-/ Stable Outlook and B/ Negative Outlook, respectively’. It concluded.
By: Vivian Kai Lokko/citibusinessnews.com/Ghana