S&P ratings: Investors are upbeat about the progress – Ken Ofori-Atta

On the recent S&P ratings, investors are upbeat about the progress made, Finance Minister Ken Ofori-Atta has said.

“Congratulations to the Management and staff of the Ministry and its agencies. Going forward, investors are upbeat about the progress. We need to sustain the progress made so far and not derail in our efforts.” Mr Ofori-Atta said in a press statement.

Standard and Poor’s (S&P) at the end of their recent assessment of the country, has upgraded Ghana to B with a stable outlook from B- with a negative outlook, thus, Ghana has achieved a credit upgrade for the first time in almost a decade.

“This achievement has come about with strong efforts in monetary and fiscal policies; Debt dynamics declined significantly for the first time in almost a decade, the primary balance recorded a surplus for the first time in almost a decade and a successful issuance of bonds at international markets during a global economic downturn.

Sovereign credit ratings are a key evaluation principle for a country’s economic and political environment, which gives investors insight into the level of risk associated with investing in a particular country,” the statement from the Finance Ministry said.

The implications of a credit rating upgrade include;
•    Sourcing for funds on the international capital market would be cheaper;
•    Commitment to transparency in political and economic development; and
•    Possibility of increased foreign direct investment.

“The upgrade reflects our assessment that Ghana’s monetary effectiveness has improved, albeit from a low base, and will support the credibility of the inflation-targeting framework over the period” the S&P report noted.

The report continued that “the stable outlook balances Ghana’s fairly robust growth prospects, decreasing inflation, and narrower current account deficits against risks from still-high budget deficits and high stock of public sector debt”

S&P has been rating Ghana since 2003. At the time, Ghana achieved a B+ with a stable outlook. Ghana maintained this rating bill till December 2008 when Ghana’s stable outlook was revised downward to a negative position.

Ghana is rated by three rating agencies, Fitch Ratings, Moody’s and Standard and Poor’s.