Ghana:S&P Global Ratings has downgraded the country’s foreign and local currency sovereign ratings to junk from B-/B to CCC+/C with negative outlook

Credit ratings agency, S&P Global Ratings has downgraded Ghana’s debt further into speculative territory, lowering the country’s foreign and local currency sovereign ratings to junk from B-/B to CCC+/C with negative outlook.

In February Moody’s downgraded Ghana to Caa1 with a stable outlook.

According to S&P Ghana’s outlook is negative, “reflecting Ghana’s limited commercial financing options, and constrained external and fiscal buffers.”

S&P C downgrade means currently the country is vulnerable to nonpayment and dependent on favorable business, financial and economic conditions.

The ratings agency however indicated that the COVID-19 pandemic and the conflict in Russia have magnified Ghana’s fiscal and external imbalances.

“Demand for foreign currency has been driven higher by several factors, including nonresident outflows from domestic government bond markets, dividend payments to foreign investors and higher costs for refined petroleum products” it said.

S&P adds that Ghana’s inability to access Eurobond markets has affected the economy.

The country’s debt stock is almost 80 per cent.