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MINISTRY OF FINANCE &
ECONOMIC PLANNING
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REPUBLIC OF GHANA
September 23, 2010
PRESS RELEASE – FOR IMMEDIATE RELEASE
FITCH CONFIRMS GHANA’S ROBUST ECONOMIC PERFORMANCE AND
STRONG GROWTH OUTLOOK (22nd September 2012)
1. Ghana’s robust economic performance, strong growth outlook, good governance
record, and favourable business environment have been cited as factors
underpinning the country’s 'B+' rating by the Fitch Ratings.
2. A statement issued by Fitch Ratings, London on Friday September 21, 2012
“affirmed Ghana's Long-term foreign and local currency Issuer Default Ratings
(IDR) at 'B+' with a Stable Outlook and Short-term foreign currency IDR at 'B'.
The agency has also affirmed the Country Ceiling at 'B+'”.
3. The ability to maintain the country’s ratings at a ceiling of B+ attests to good
governance and demonstrates the capacity of the country to repay external and
domestic debt liabilities, thereby, giving confidence to investors accessing
sovereign debt opportunities in Ghana.
4. According to the Fitch Rating Statement, Ghana’s growth is forecast at an average
of 8.6% over the next three years. This growth will be boosted by rising oil
production and its positive spillover effects on the economy as well as
infrastructure spending. Over the past three years Government has committed
itself to significant infrastructural investments in Roads &Transport, Agriculture,
Energy, Oil & Gas sectors, among others.
5. The Oil & Gas sector has been identified by Fitch Rating as a major growth pole
which will provide diversification of economic activities. Oil production is
forecast to rise to 120,000 barrels per day (b/d) in 2013 and is expected to
increase further to 600,000 b/d by 2018 according to Ghana National Petroleum
Company (GNPC). The monetisation of Ghana's gas which is expected to begin in
2013 will lower the cost of power and improve competitiveness. Oil & Gas
revenues would also support the country's public and external balance sheets over
the medium term.
6. The Statement noted that the cedi which depreciated by 30% in the first half of
2012 appears to have stabilized due in part to Bank of Ghana’s (BOG) policy
interventions as well as foreign demand for domestic bond.
7. The BOG interventions include (i) reintroduction of BOG bills to provide
additional avenues for cedi investments (ii) revision in the application of the
statutory reserve requirement of banks to maintain the mandatory 9% reserve
requirement on domestic and foreign deposit liabilities in Ghana Cedis only, and
(iii) provision of 100% cedi cover for vostro balances.
8. The Statement also notes that the revision of the 2012 fiscal deficit from 4.8% of
GDP as provided in the 2012 main budget to 6.7% is occasioned by repayment of
arrears, 18% public sector wage increases and increased energy subsidies.
9. As the Ministry of Finance and Economic Planning admits to its delight in this
rating, it would be pertinent to point out that the revision of the fiscal deficit from
4.8% of GDP to 6.7% of GDP was effected during the year to accommodate
emerging challenges and, therefore, could not be considered as a slippage.
10. The Ministry has initiated a number measures to deal with fiscal risk occasioned
by the implementation of the Single Spine Pay Policy. These measures include the
payroll biometric registration exercise which is aimed at cleaning and updating
the database of all public service personnel. Measures have also been put in place
to strengthen expenditure management and budgetary control including the
commitment from the Presidency to ensure that only budgeted expenditures are
accommodated within the 2012 budget appropriation.
11. The Fitch Rating identified continued strong growth combined with convincing
track record of good macroeconomic management and fiscal consolidation as
factors which could put upward pressure on the rating. END
ENOCH H. COBBINAH
CHIEF DIRECTOR
FOR: MINISTER
THE NEWS EDITOR