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Mills’ death won’t affect Ghana’s B ratings

Standard & Poor’s Ratings Services said today that the death of President Atta Mills as the result of illness will have no immediate impact on its ratings and outlook on the Republic of Ghana (B/Stable/B).

Ghana’s well-established democracy ensured a relatively smooth transition from Mr. Mills to Vice-President John Mahama. Under Ghana’s constitution, the vice-president is sworn in as the new president if the incumbent dies in office; soon after Mr. Mill’s death on July 24, Mr. Mahama was sworn in.

Ghana remains one of Africa’s most stable democracies; both major parties have relinquished power after losing elections. Even though Ghana’s last presidential election result in 2008 was very close–less than 1% of the vote separated the winner from the loser–former president Mr. John Kufuor stepped down in strict adherence to the constitution, enabling a smooth transition of power.

The new president, Mr. Mahama, has promised policy continuity. While it remains unclear whether Mr. Mahama will represent the governing National Democratic Party in Ghana’s elections, which are scheduled for December of this year, it is likely that the party will not significantly alter its economic policy stance. Meanwhile, the leader of the opposition, Mr. Nada Akufo-Addo has highlighted that the orderly transition was a demonstration of Ghana’s mature democratic system and temporarily suspended campaigning out of respect for the former president.

The ratings on the Republic of Ghana continue to be constrained by our view of the country’s fiscal management, which has contributed to large fiscal deficits as well as supplier arrears. The ratings are supported by strong GDP growth, strengthening oil production volumes, and a track record of political stability.

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