Chief Executive Officer of Dalex Finance, Joe Jackson, has emphasized the need for the government to persist with its spending reductions to uphold and enhance the recent positive credit ratings assigned by Moody’s.
The credit rating agency has recently upgraded Ghana’s long-term issuer ratings for both local and foreign currencies, showcasing the country’s progress in debt restructuring and efforts toward fiscal consolidation. The local currency rating increased from “Caa3” to “Caa2,” and the foreign currency rating also saw an upgrade from “Ca” to “Caa2.”
This positive adjustment is largely due to Ghana’s successful completion of a comprehensive external debt restructuring, which has eased significant financial burdens on the government.
Jackson has urged the government to exercise fiscal prudence to sustain this favorable rating.
‘‘All we call for is this, that this government, the power that be, those doing the right thing, curbing expenditure, staying within budget, will continue to do so even though this is an election year, so that we can continue to maintain the gains we have made and move forward’’, Joe Jackson advised.
Approximately 98 percent of Euro Bondholders endorsed a $13 billion debt restructuring plan, marking a significant move toward resolving the nearly $30 billion debt default that occurred in 2022.
According to Moody’s, this debt resolution has been pivotal in bolstering the nation’s financial stability.
The rating agency highlighted improvements in fiscal management, such as enhanced discipline, reduced budget deficits, and strengthened debt sustainability.
Additionally, it pointed to resilience amid economic challenges, positive policy reforms aimed at boosting business competitiveness, attracting investment, and a robust financial sector.
Joe Jackson remarked that with Moody’s upgrade of Ghana’s credit rating from Caa3 to Caa2, the country stands to gain from lower interest rates in international capital markets, increased foreign direct investment, greater confidence in its economy, and improved access to financing.
‘‘The upgrade signals that Ghana is taking steps to come out of the pit that we were in, in 2022. When we were downgraded, failed to pay our debts, unable to negotiate and the country was in a really bad economic crisis. The Moody’s upgrade signals that we are taking the baby steps out. We have renegotiated with all creditors, we have started on the road to recovery’’, Joe Jackson said.
An improved credit rating will provide Ghana with enhanced access to international capital markets and additional financing options.