International credit rating firm, Moody’s Investor Services, has warned that the second term of the Akufo Addo administration will continue to face major economic challenges that could affect the country’s ability to secure favourable credit internationally.
Speaking after the Electoral Commission had controversially declared President Akufo-Addo winner of the 2020 elections, Kelvin Dalrymple, a vice president and sovereign analyst at Moody’s said: “On 9 December 2020, the Ghana Electoral Commission declared that incumbent President Nana Addo Akufo-Addo was elected to a second term.”
‘’The returning administration will continue to face key challenges constraining Ghana’s creditworthiness, including low growth after the coronavirus shock, weak government revenues, low oil prices, and energy sector contingent liability risks. Moreover, a weakened mandate resulting from a diminished parliamentary majority will further complicate fiscal and economic reform prospects.”
Incidentally, Ghana’s debt to GDP, has crossed unsustainable levels of over 71% currently and is expected to plateau above 76% by the close of the year.
Moody’s has warned that a further weakening in debt affordability amid persisting refinancing risks would indicate a fundamental deterioration in government’s debt-service capacity, resulting in another downgrade at the next rating.