Does Credit Ratings Agencies Determines the Size & Success of an Economy? Certainly Not: Razak Kojo Opoku Writes


An American credit rating agency known as S&P Global Ratings on August 5th, 2022 downgraded Ghana’s credit rating from B- to CCC+, reflecting Ghana’s limited commercial financing options, and constrained external and fiscal buffers. S&P Global Ratings has lowered Ghana’s foreign and local currency and Sovereign ratings to CCC+ and the NDC members are extremely happy with this report.

However, Ato Forson and NDC members failed to further read about the reasons cited by S&P Global Ratings in support of its CCC+ rating for Ghana. The S&P Global Ratings also stated in its report that, “the COVID-19 pandemic and the Conflict in Russia-Ukraine have MAGNIFIED Ghana’s fiscal and external imbalances”. This means that the CCC+ rating is NOT as result of mismanagement or incompetence on the part of Akufo-Addo’s Government but due to external factors as stated by S&P Global Ratings in its report.

The current CCC+ rating by S&P Global Ratings certainly might not be the true reflection of the reality of Ghana’s creditworthiness and its economic viability because:
1. In June 2022, Ghana was ranked 1st in West Africa and 2nd in Sub Saharan Africa by Fitch Solutions, research arm of Fitch Credit Ratings Agency as the BEST Destination for Investments and trade. Ghana had Trade and Investment Risk Score of 50.9%, outperforming the West African average of 36.4%.

2. According to RMD Analysis, Ghana was ranked the TOP Investment Destination in West Africa beating Nigeria, Ivory Coast, Senegal, and the rest of the West African Countries.

3. According to World Bank Report(2020), Ghana is the LEADING destination for foreign investment in West Africa and one of the fastest growing economies in the world.

4. fortunately for Ghana and unfortunately for S&P Global Ratings, Ghana has successfully already secured $750 million loan from African Export-Import Bank(Afrexim Bank), $1.3 billion Cocoa syndicated loan plus going back to the IMF and also supported by E-levy policy.

The re-profiling of Ghana’s debt certainly discredits the CCC+ rating by S&P Global Ratings therefore there is no cause for worry. S&P Global Ratings will definitely revise its notes and properly rate Ghana again.

Ghana under Akufo-Addo’s government will not default on its pending maturing Eurobonds, Investments as predicted by IC Securities in its brief on Ghana

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