Moody's: Ghana’s credit profile captures several positive developments

Ghana, a country celebrating its 63rd year of independence, is capturing positive developments in its credit profile, according to Moody's Investors Service. Elisa Parisi-Capone, Vice President and Senior Analyst of the Sovereign Risk Group at Moody's, highlighted various advancements in Ghana's economy during a recent interview with CNBC Africa. The country has showcased progress in its macroeconomic and fiscal stability post the fiscal crisis of 2014-15, aided by institutional improvements through the completion of an IMF program. Key positive developments include a return to primary surpluses, a more secure power supply, and the utilization of oil and gas resources for foreign exchange revenues. Improved access to liquidity, both domestic and international, has also contributed to Ghana's credit profile enhancements. Despite these advancements, challenges like weak revenue generation capacity and high interest bills persist, absorbing a significant portion of total revenues. Moving forward, addressing revenue collection and energy sector liabilities will be crucial for Ghana's economic stability. The government's commitment to fiscal discipline and revenue enhancement is essential, along with managing the energy sector's contingent liabilities effectively. Moody's has assigned a positive outlook recently, reflecting confidence in Ghana's ability to navigate these challenges. The government's implementation of outlined reform steps, including optimizing domestic gas utilization for energy cost reduction and renegotiating take-or-pay contracts in the energy sector, will be closely monitored over the next 12 to 18 months. These reforms are expected to contribute to Ghana's economic resilience and sustainability in the long run, with Moody's closely observing the government's progress. With a focus on fiscal transparency and risk reduction, Ghana aims to strengthen its economic foundation and maintain a positive credit outlook. As Ghana continues its journey towards economic progress, Moody's assessment provides valuable insights into the country's credit profile and the path ahead.