Standard & Poor's Ratings Services said it affirmed its Republic of Ghana's 'B+' long-term and 'B' short-term sovereign credit rating, citing economic growth, political stability.
S&P said the rating reflects political stability and reforms arising from privatisation and the gradual liberalisation of the country's capital account. The stable environment has attracted large inflows of remittances and increased output of gold and cocoa, resulting in broadly stable real GDP growth of more than 5.5 pct since 2004.
Ghana's external and fiscal debt indicators improved significantly with central government external debt falling to 18 pct of GDP in 2006, from 59 pct in 2005.
However, the ratings remain constrained by the country's reliance on cocoa and gold which makes it vulnerable to high commodity prices and agriculture output volume. Hydroelectric energy shortages also imply the need for increased oil imports for thermal power plants, which will keep current account deficits at 8.4 pct of GDP, the release said.
S&P added that a widening of general government deficit caused by fiscal pressures and high development needs imply that Ghana's fiscal accounts will be reliant on donor flows for many years to come.
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