Finance Minister Seth Terkper is optimistic recent revision of Ghana’s Long Term Bond Ratings from negative to stable by international Credit Ratings Agency, Moody’s will influence Ghana’s economic outlook. Moody’s, in its recent economic report of Ghana defined the economic outlook as positive, affirming the rating at B31.
The report cited significant fiscal deficit reduction and success in implementing structural reforms over the past year, as well as reduction in government liquidity risk on the external side.
The agency pointed out that the proceeds of the US$750m Eurobond earmarked for debt repayments is part of the key drivers for the stabilization of the rating.
Other reasons cited for the revision were improved balance of payments dynamics, including improved FDI inflows and continued development of oil and gas resources.
Speaking to Citi Business News in reaction to the report, Mr. Terkper was hopeful other credit ratings will also revise their outlooks of Ghana’s economy.
“The factors that are leading to the upgrade are the IMF programme, the home grown policies and the general performance of the economy as a whole. What we have seen is the downgrade stopping, and we remaining at our ratings. We are hopeful that the other rating agencies which also halted the downgrade will also start moving towards a positive rating,” he said.
He was of the view that the ratings reflect the general performance of the economy as government embarks on fiscal consolidation.
He stated that the sacrifices and the dedication of the fiscal team, aimed at practicing financial discipline is the result of the ratings.
Assuring that government will not overrun the budget during this election year, Mr. Terkper maintained that the Finance Ministry is keen on following fiscal roadmaps to cut down on over spending.
“Some recommendations that come in the form of criticisms have helped. The idea that in election years we over shoot the budget above 3 percentage points of GDP will stop,” he stressed.
Touching on the impact of Ghana’s external factors, Mr. Terkper was optimistic the rate at which government borrows from the primary and secondary markets will improve.