Moody’s Investors Service has downgraded Ghana’s long-term issuer ratings to Ca from Caa2 and changed the outlook to stable.
This concludes the review for downgrade that was initiated at the time of the 30th September, 2022 rating action.
The Ca rating reflects Moody’s expectation that private creditors will likely incur substantial losses in the restructuring of both local and foreign currencies debts planned by the government as part of its 2023 budget proposal to Parliament.
Given Ghana‘s high debt burden and the debt structure, it is likely there will be substantial losses on both categories of debt in order for the government to meaningfully improve debt sustainability.
The stable outlook balances Moody’s assumption that, the debt restructuring will happen in coordination with creditors and under the umbrella of a funding programme with the IMF, against the potential for a less orderly form of default that could result in higher losses for private-sector creditors.
Finally, Moody’s has lowered Ghana’s local currency and foreign currency country ceilings to Caa1 and Caa2, from B2 and B3, mirroring the downgrade of the sovereign ratings by two notches.