A statement issued by Fitch Ratings, London, on September 21, 2012 also acknowledged Ghana’s good governance record and favourable business environment as factors underpinning the country’s B+ rating.
The international agency “affirmed Ghana's long-term foreign and local currency Issuer Default Ratings (IDR) at B+ with a stable outlook and short-term foreign currency IDR at B. The agency has also affirmed the country ceiling at B+”.
The statement stressed that Ghana’s ability to maintain its rating at a ceiling of B+ attested to good governance and demonstrated its capacity to repay external and domestic debt liabilities, thereby giving confidence to investors accessing sovereign debt opportunities in Ghana.
Fitch Ratings, which forecast Ghana’s growth at an average of 8.6 per cent over the next three years, projected the country’s growth to be boosted by rising oil production and its positive spillover effects on the economy, as well as infrastructure spending.
Over the past three years, the government has committed itself to significant infrastructural investment in the roads and transport, agricultural, energy, oil and gas sectors, among others.
The oil and gas sector has been identified by Fitch Ratings as a major growth pole which will provide diversification of economic activities.
Oil production is forecast to rise to 120,000 barrels per day (b/d) in 2013 and is expected to increase further to 600,000 b/d by 2018, according to the Ghana National Petroleum Company (GNPC).
The monetisation of Ghana's gas, which is expected to begin in 2013, will lower the cost of power and improve competitiveness.
Oil and gas revenues will also support the country's public and external balance sheets over the medium term.
The statement noted that the cedi, which depreciated by 30 per cent in the first half of 2012, appeared to have stabilised due, in part, to the Bank of Ghana’s (BoG) policy interventions, as well as foreign demand for domestic bond.
It also noted that the revision of the 2012 fiscal deficit from 4.8 per cent of GDP, as provided in the 2012 main budget, to 6.7 per cent was occasioned by the repayment of arrears, 18 per cent public sector wage increases and increased energy subsidies.
As the Ministry of Finance and Economic Planning takes delight in this rating, it is pertinent to point out that the revision of the fiscal deficit from 4.8 per cent of GDP to 6.7 per cent of GDP was effected during the year to accommodate emerging challenges and, therefore, could not be considered as a slippage.
The ministry has initiated a number of measures to deal with the fiscal risk occasioned by the implementation of the Single Spine Pay Policy (SSPP).
These measures include the payroll biometric registration exercise which is aimed at cleaning and updating the database of all public service personnel.
source: Daily Graphic
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