Ghana’s central bank is printing money to help finance the government’s budget deficit, threatening to fuel inflation and weaken a currency that’s already the worst performer in Africa this year.
Ghana’s failure to narrow its budget deficit more quickly may add to debt, threatening a credit downgrade, Fitch Ratings said.
South Africa may miss its economic growth target this year, curbing tax revenue and leading to bigger-than-planned budget deficits, according to Standard & Poor’s and Fitch Ratings.
Zambia’s credit rating was cut by Fitch Ratings after Africa’s largest copper producer said that spending on wages and subsidies will widen the budget deficit more than forecast.
The cost of goods leaving South African factories and mines rose at the fastest pace in 15 months in May, following a pick-up in fuel and food prices.
South African credit contracted for a seventh consecutive month in April as the ranks of the unemployed swelled following the first recession in 17 years.
"Printing money to finance the deficit will aggravate already high inflation and contribute to further cedi weakness."
- Carmen Altenkirch on Jun 09, 2014