Global Ratings agency S&P on Tuesday lowered the sovereign rating on Ghana to ‘selective default’ from CC, a day after the country announced it would suspend its debt payments.
S&P Ratings said it views the moratorium as a ‘selective default’, and did not issue any outlook.
“We expect to lower our ratings on Ghana’s foreign currency issues to ‘D’ (default) if the government fails to make the next scheduled coupon payment on its commercial foreign currency debt,” the ratings agency said.
The downgrade comes after the Finance Ministry announced the suspension of payments on some portions of its external debt including Eurobonds.
A statement by the Finance Ministry on Monday, December 19, stated that the suspension will include the payments on our Eurobonds; our commercial term loans; and most of the country’s bilateral debt.
The suspension, according to the statement will, however, not affect the payments of Ghana’s multilateral debt, new debts (whether multilateral or otherwise) contracted after 19th December 2022 or debts related to certain short-term trade facilities.
“We are also evaluating certain specific debts related to projects with the highest socio-economic impact for Ghana which may have to be excluded. This suspension is an interim emergency measure pending future agreements with all relevant creditors,” parts of the statement read.
Source: theGhanaianVoice.Com