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Ghana’s credit rating downgrade described as unfortunate by minister

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The recent downgrade of Ghana’s credit rating from B to B-negative by the international ratings agency, S&P Global, has been described as unfortunate by the country’s Ministry of Finance.

The ministry said, in a statement on Monday, 14 September 2020, that the downgrade was widespread – affecting other countries worldwide as well. It said that it found it disturbing that rating agencies would choose that path at a time when countries, including Ghana, were battling an unprecedented crisis.

“It is very unfortunate that rating agencies will choose to downgrade our countries in these unprecedented times,” local media reports quoted the Public Affairs Department of the Ministry of Finance as saying.

It noted that the agency, however, affirmed the short-term ratings at B, with the outlook being adjudged as stable. According to the statement, the lowering of the rating was mainly on account of the government’s decision to increase public spending to help contain the impact of the COVID-19 pandemic on lives and the economy.

The statement said a review of global credit ratings indicated that Ghana was not the only country to suffer a lowering of sovereign credit ratings. It noted that more than 80 countries have been affected, with negative outlook revisions for the year being more than 100.

“Most of these credit rating downgrades and negative outlook revisions are heavily concentrated on the countries who, previously, were at B/B2 credit ratings. These adverse rating actions have touched almost all continents, as rating agencies react to the effects of the pandemic on the global economy,” it said.

The ministry explained that the government was focused on saving lives and livelihoods, and that required some temporary fiscal and economic adjustments, including some one-off expenditures.

“The government chose to save lives and, therefore, instituted temporary life-saving initiatives and interventions aimed at protecting the general population against the negative economic effects of the pandemic,” it added.

-APA

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