An African Union-backed panel has urged Moody’s Investors Service to review an appeal by government against the rating agency’s downgrade of the country’s credit rating.
Moody’s reviewed Ghana’s long-term debt one step down to Caa1 from B3 on Friday, 4th February, 2022.
The Finance Ministry on Sunday, 6th February, 2022 criticised Moody’s decision to lower its rating further into junk status and said the company used incomplete data.
“Taking such a major rating decision that threatens debt sustainability of the country should be treated with seriousness,” the African Peer Review Mechanism said in a statement on its website.
“Moody’s has failed to do that”, it added.
Finance Ministry appeals against Moody’s downgrade of Ghana’s rating
The Finance Ministry on Sunday 6th February, 2022, appealed against the downgrade of the country’s credit rating to Caa1, from B3 by Moody.
It cited the omission of key material information from the assumptions driving some of Moody’s forecasts and projections such as the 2022 budget expenditure control measures, the 2022 upfront fiscal adjustments and inaccurate balance of payment statistics as well as the appointment of a new primary credit analyst, only four weeks prior to such a major credit rating decision as the major reasons.
It also questioned the committee’s refusal to consider deferring such a monumental rating action until the analyst had enough time to more fully understand both the quantitative and qualitative aspects of the Ghana credit story.
In a statement, it said the Government of Ghana is completely puzzled by the decision to downgrade Ghana’s credit rating to Caa1, despite the series of progressive engagements it had with the team from Moody, the quality of the data supplied, as well as the medium-term economic and fiscal focus of the government, underpinned by key fiscal consolidation reforms such as the policy decision to cut expenditure by 20%, as recently announced by the Minister for Finance, Ken Ofori-Atta.