Global Ratings agency S&P has lowered the sovereign rating on Ghana to 'selective default' from CC, a day after the country announced it would suspend its debt payments to some external creditors including holders of Eurobonds.

This is the second time within two weeks that the international rating agency has cut Ghana’s credit rating to further junk status

According to the rating agency, it views the moratorium as a 'selective default', and did not issue any outlook.

"We expect to lower our ratings on Ghana's foreign currency issues to 'D' (default) if the government fails to make the next scheduled coupon payment on its commercial foreign currency debt," the ratings agency said.

On December 7, 2022 when S&P downgraded the country, it said Ghana’s proposed local debt swap is a “distressed exchange offer,” earning those bonds the “selective default” rating, while the foreign currency bonds downgrade responds to the government’s announced plans to restructure that debt.

The government on December 19, 2022, announced a suspension of all debt service payments under certain categories of external debt, pending an orderly restructuring of the affected obligations.

The suspension included the payments on Eurobonds, commercial term loans, and on most bilateral debt.

This suspension, it said in a statement from the Finance Ministry, will not include the payments of multilateral debt, new debts (whether multilateral or otherwise) contracted after December 19, 2022 or debts related to certain short term trade facilities.

This decision by the government was expected to trigger downgrades by the rating agencies.