Fitch downgrades Ghana

Fitch Ratings said it downgraded Ghana's long-term foreign- and local-currency issuer default ratings and senior unsecured ratings to B from B+.

The outlook is stable.

The country ceiling also was downgraded to B from B+.

The agency also said it affirmed the short-term foreign-currency issuer default rating at B.

The downgrade reflects Ghana's creditworthiness, which was weakened further by the government's failure to fully implement its fiscal consolidation plan in 2013, Fitch said.

This follows a sharp widening in the budget deficit to 11.8% of GDP from 4% in 2011 and rising debt levels, the agency said.

Authorities continued to overrun on wages, interest costs and arrears, leading the agency to expect the government to fail to meet the 9% of GDP fiscal-deficit target for this year, Fitch said.

However, the decision to sharply increase utility tariffs and scrap the fuel subsidy reduces the risk of an overrun in the coming fiscal years, the agency said.

Fitch said it forecasts that lower gold prices and still strong import demand will put further pressure on external balances.

The ratings are supported by Ghana's strong governance track record and democratic history, highlighted by peaceful power transfers and respect for judicial due process, Fitch added.

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