After Moody’s cut, Ghana finance ministry says ratings agencies biased against Africa

Ghana’s Finance Minister Ken Ofori-Atta makes a remark at the Institute of International Finance meeting titled ‘G20: Compact with Africa’, during the 2017 IMF and World Bank Fall Annual Meetings, in Washington, U.S., October 11, 2017. REUTERS/Mike Théiler

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ACCRA, Feb 7 (Reuters) – Ghana’s finance ministry said Moody’s decision to downgrade its credit rating was taken by omitting key information and exposed an institutional bias against African economies.

Ratings agency Moody’s downgraded Ghana from B3 to CAA1 on Friday, citing the “increasingly difficult task facing the government in addressing liquidity and debt challenges”.

Ghana’s second downgrade in three weeks, after Fitch Ratings adjusted Ghana from B to B last month, citing concerns over its ability to issue bonds in 2022, sent its dollar bonds plummeting. Read more

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“We are gravely concerned by what appears to be an institutionalized bias against African economies in this regard…regardless of the negative impact on the cost and access to finance for African sovereigns,” said the Ghanaian Ministry of Finance in a statement dated Sunday. and posted on its website on Monday.

“We will actively continue to support the global outcry against this leviathan,” he added.

The Ministry of Finance said Moody’s failed to take into account key information in its assessment, which it said was made without giving a new senior credit analyst enough time to understand Ghana’s economy.

Ghana formally appealed the new rating, but Moody’s rejected it and proceeded with the downgrade, the statement said. It was not immediately clear whether Accra would file another appeal.

Moody’s did not immediately respond to a request for comment.

Economists fear the West African nation is heading for a debt crisis, as it grapples with a double-digit budget deficit and rising inflation.

Hoping to rally investors and stabilize bond yields, Ghana said last month it would cap spending at 80% of what was approved for the 2022 budget until the deficit outlook are improving.

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Reporting by Christian Akorlie and Cooper Inveen; Additional reporting by Karin Strohecker; Editing by Tomasz Janowski

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