Fitch ratings agency downgraded
Ghana's sovereign rating on Thursday saying the government of
the gold, cocoa and oil producing country wasn't keeping tight
enough control of its spending.
Ghana is considered one of Africa's brightest economic
prospects with a stable democracy and an economy expected to
keep growing at 8 percent in 2013.
But economists have increasingly expressed concern this year
about the risks posed by a high budget deficit and rising debt.
"Ghana's creditworthiness has been further weakened by the
government's failure to fully implement its fiscal consolidation
plan in 2013," Fitch said in a statement after it cut Ghana's
rating to B from B-plus. It said the outlook was stable.
"The authorities continued to overrun on wages, interest
costs and arrears, leading Fitch to expect that the government
will fail to meet the 9 percent of GDP (gross domestic product)
fiscal deficit target for this year," the rating agency added.
Central bank Governor Henry Kofi Wampah told Reuters after
the Fitch statement that Ghana will keep monetary policy tight
and expects increased inflows from oil and gas production to
help stabilise its finances in early 2014.
"The combination of monetary policy and increased flows from
the external sector as well as the fiscal consolidation going
forward are factors that we believe will normalise the situation
and ease pressure on the markets," he told Reuters by telephone.
Concerns about economic management in the country of 25
million people grew in February when the government of President
John Mahama announced the 2012 budget deficit reached 12.1
percent of GDP, nearly double its target.
Moody's Investors Service rates Ghana B1 with a stable
outlook. Standard & Poor's rates Ghana B, also with a stable
outlook.
Ghana's cedi currency, which has weakened almost 14 percent
this year, held steady on Thursday at 2.1750 to the dollar,
according to a Standard Bank trader. The Ghana Stock Exchange
remained flat, according to dealers.
Source .REuters
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