Ghana will no longer pursue a $1 billion bridge finance from the Bank of America Corp.
James Klutse Avedzi, chairman of the finance committee in parliament confirmed the development to Bloomberg on Friday, adding the Ministry of Finance has withdrawn the proposal.
Ghana will receive a $918 million from the IMF to help salvage an ailing economy.
Downgrade
Moody’s has downgraded Ghana’s sovereign rating from B2 to B3 with a negative outlook in its latest release. Ghana has served notice that the slumping oil prices on the world market have affected government's budget deficit.
Moody's said the key drivers informing its decision are:
1) Deteriorating debt dynamics as reflected by an increasing debt burden due to large fiscal imbalances and a sharp weakening of the country’s national currency, combined with reduced debt affordability stemming from a high cost of funding in the domestic market;
2) Increased government liquidity risks, as the government faces large gross borrowing requirements amid more difficult domestic and external funding conditions.
“The negative outlook reflects further downside risk to the country’s debt dynamics and liquidity pressure in the short-term if the country’s policies fail to successfully contain its fiscal deficit, stabilize its currency and address current impediments to higher economic growth,” Moody’s said.
Source: Ghana/starrfmonline.com/103.5FM