While Ghana is distracted by the devastating Covid-19 coronavirus, the global ratings organisation, Moody’s downgraded the country’s creditworthiness.
On Friday, 17th April 2020, Moody’s downgraded Ghana’s outlook from B3 Positive to B3 Negative.
The decision reflects the rising risks from the coronavirus outbreak in Ghana to its ability to service its debts.
According to Economics professor, Professor John Gatsi, “The negative outlook signals low confidence and uncertainty about repayment capability of the Ghanaian economy going forward. This is negative news. This is a negative development as the same Moody’s revised upward from stable to positive early this year.”
“Do we blame this on COVID-19 pandemic? It depends on the appreciation of economic data. The revised and finalized economic data for Ghana showed uninspiring pre-2020 economic data that reflects negative primary balance, low international reserve, low revenue compared to expenditure. Also, 2019 showed very high fiscal deficit and deteriorating debt to GDP ratio, general liquidity challenge and cost of tradable bonds moving up the yield curve,” Prof Gatsi wrote in a statement copied to Whatsup News.
Prof. Gatsi thinks Ghana can blame the COVID-19 coronavirus for the bad rating because it “has worsened revenue prospects of the economy suspended the fiscal responsibility framework and demonstrated in the past few weeks that the country is resource hungry and “debt aggressive”.