Economist and Political Risk Analyst, Dr. Theo Acheampong has described the revision of Ghana’s credit rating to CCC+/C by S&P Global Rating as putting the country’s financial landscape into a more precarious situation.

According to him, the government must quickly fast-track the negotiation with the International Monetary Fund to secure an economic programme urgently, in order to bring credibility to the country’s ability to borrow from the international capital markets.

Speaking on the Super Morning Show Monday August 8th, 2022, Dr. Acheampong said S&P’s rating indicates that Ghana is one step away from defaulting in repaying of its loans.

“What this really has done is that it has made the financing landscape of the country even more challenging because the country’s debt has been pretty much put into a speculative trajectory. And we are only one step below being classified or as being in default in that regard”.

“So the financing landscape has become extremely challenging or limiting for the government; the deficit and the debt is rising amidst all the follow-on-effect of the pandemic and the war in Ukraine, it does mean that things are going to be challenging”, he stressed.

S&P was the only rating agency among the big three that did not downgrade Ghana earlier in the year.

It maintained the country’s credit rating at B-/B, but with a negative outlook.

Dr. Acheampong said the rating agency had to revise its earlier rating because government’s tax measures including the Electronic Transaction Levy expected to have rake in more revenue have failed to do so.

“If you recall S&P earlier in the year decided not to downgrade Ghana when the two other rating agencies i.e. Fitch and Moody’s had done so. And they [S&P] said that with the expectation that some of the new revenue measures, E-levy, and additional collections will come through.”

“But half year through the year, what we’ve seen actually is that the e-levy is underperforming and collecting 10% of the intended target”, he added.