Moody’s upgrades outlook for Ghana as govt. improves fiscal, macroeconomic stability

RATINGS agency Moody’s Investors Service changed its outlook for Ghana – Africa’s largest gold producer – to positive from stable and affirmed the country’s B3 rating.

“The decision to assign a positive outlook reflects Moody’s rising confidence that the country’s institutions and policy settings will foster improved macroeconomic and fiscal stability over the medium term, in part as a consequence of the reforms implemented under the recent IMF reform program,” said Moody’s in a statement.

It said that “pressures and risks remain”, as evidenced by persistent revenue challenges, a potential repeat of pre-election fiscal cycles, and “… the emergence of significant arrears and further contingent liabilities in the energy sector, all contributing to rising public debt”.

The positive outlook reflects increasing confidence that the government will manage those pressures in such a way as to sustain and enhance external and fiscal stability, it said.

Ghana recently delayed the sale of $750m of shares in a gold mining fund as the government reviewed the rules and processes that dictate mineral royalty payments, said Bloomberg News citing people according to people familiar with the matter.

Ghana planned to hold the public offering this month, but postponed it until March. The IPO was to be structured in such a way that it receive royalties and pay dividends from these inflows. This prompted the government to reassess whether its systems are sufficiently robust to secure all income due, said Bloomberg News.


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