{"id":323,"date":"2014-02-14T16:59:50","date_gmt":"2014-02-14T16:59:50","guid":{"rendered":"http:\/\/citi.hatuasolutions.com\/?p=323"},"modified":"2014-02-14T16:59:50","modified_gmt":"2014-02-14T16:59:50","slug":"ghana-will-miss-2014-deficit-target-moodys","status":"publish","type":"post","link":"https:\/\/citifmonline.com\/?p=323","title":{"rendered":"Ghana will miss 2014 deficit target – Moody\u2019s"},"content":{"rendered":"
\"Seth<\/a>
Seth Tekper is Finance Minister<\/figcaption><\/figure>\n

Rating agency Moody’s is predicting Ghana\u2019s fiscal deficit will hit double digits by the end of this year.<\/span><\/p>\n

Government\u2019s deficit target for this year is 8.5% of GDP.\u00a0Last year it failed to meet this target.<\/p>\n

The prediction is contained in Moody’s latest report on Ghana which did not constitute a rating action.<\/p>\n

The report says\u00a0Ghana’s current rating of B1, negative outlook is constrained by the ongoing weakness in the government’s fiscal position due to ongoing spending overruns on the public-sector wage bill, high interest costs and the clearance of payment arrears.<\/p>\n

Moody’s says that additional constraint to Ghana’s B1 rating include delays to fiscal consolidation plans and the government’s recent decision to impose currency controls and hike interest rates.<\/p>\n

Other factors weighing on Ghana’s creditworthiness include the government’s deteriorating debt trend, with the debt-to-GDP ratio forecast to reach 51.2% of GDP by end of 2014, and the intensification of domestic financing pressures.<\/p>\n

Domestic debt servicing costs in 2013 were almost 40% above the government’s budgeted level and now consume 20% of government revenues.<\/p>\n

It believes Ghana is also susceptible to a degree of external economic shocks, reflected in the elevated external vulnerability measures notably in the form of a large current account deficit and low foreign exchange reserves.<\/p>\n

Moody’s noted that Ghana’s key credit strengths include the economy’s strong growth potential as a result of its abundant natural resources, further supported by the development of its oil and gas potential.<\/p>\n

While the economy is small, it is more diversified than most single-B and Ba-rated peers, with the services sector contributing half of GDP.<\/p>\n

The rating is further supported by its long track record of political stability and high level of democratic governance.<\/p>\n

However, the outlook on Ghana’s rating is negative and reflects Moody’s expectations that the fiscal deficit for 2014 will come in well above the government target of 8.5% of GDP and could reach double-digits for the third year running on account of optimistic revenue projections.<\/p>\n

Downward pressure on the rating could arise from (1) sustained high or rising fiscal deficits and government debt burden; (2) a persistent decline in oil, gold or cocoa prices that would put downward pressure on fiscal revenues and export receipts; or (3) diminished access to foreign investment or portfolio capital, which would elevate debt rollover risk and aggravate debt-servicing costs.<\/p>\n

In contrast, a return to a stable outlook on Ghana’s sovereign ratings could develop if an acceleration in fiscal consolidation progressively reduces the government’s debt burden over the medium term.<\/p>\n

Other drivers could include a substantial bolstering of Ghana’s foreign-exchange and\/or fiscal reserves that would reduce the country’s vulnerability to domestic or external shocks, as well as a strengthening of FDI inflows.<\/p>\n

 <\/p>\n

By: Vivian Kai Mensah\/citifmonline.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":"

Rating agency Moody’s is predicting Ghana\u2019s fiscal deficit will hit double digits by the end of this year. Government\u2019s deficit target for this year is 8.5% of GDP.\u00a0Last year it failed to meet this target. The prediction is contained in Moody’s latest report on Ghana which did not constitute a rating action. The report says\u00a0Ghana’s […]<\/p>\n","protected":false},"author":5,"featured_media":334,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_social_meta":[],"jnews_override_counter":[],"footnotes":""},"categories":[],"tags":[4],"class_list":["post-323","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-st-augustines-college"],"_links":{"self":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=323"}],"version-history":[{"count":0,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/323\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/"}],"wp:attachment":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}