Ghana downgraded deeper into junk status by Moody’s

Moody’s has downgraded Ghana’s sovereign rating to B3 with a negative outlook in its latest release.

Moody's said the key drivers informing its decision are:

1) Deteriorating debt dynamics as reflected by an increasing debt burden due to large fiscal imbalances and a sharp weakening of the country’s national currency, combined with reduced debt affordability stemming from a high cost of funding in the domestic market;

2) Increased government liquidity risks, as the government faces large gross borrowing requirements amid more difficult domestic and external funding conditions.

“The negative outlook reflects further downside risk to the country’s debt dynamics and liquidity pressure in the short-term if the country’s policies fail to successfully contain its fiscal deficit, stabilize its currency and address current impediments to higher economic growth,” Moody’s said.