Moody's Investor Service says that the country's rating of B1, negative outlook, is constrained by the ongoing weakness in the government's fiscal position due to ongoing spending overruns on the public-sector wage bill, high interest costs, and the clearance of payment arrears.

These factors are partially offset by the economy's robust growth potential, supported by its abundant natural resources. The rating agency's report is an update to the markets and does not constitute a rating action.

Moody's says that additional constraints to Ghana's B1 rating include delays to fiscal consolidation plans and the government's recent decision to impose currency controls and hike interest rates.

Other factors weighing on Ghana's creditworthiness include the government's deteriorating debt trend, with the debt-to-GDP ratio forecast to reach 51.2% of GDP by end of 2014, and the intensification of domestic financing pressures.

Domestic debt-servicing costs in 2013 were almost 40% above the government's budgeted level and now consume 20% of government revenues. Ghana is also susceptible to a degree of external economic shocks - reflected in the elevated external vulnerability measures, notably in the form of a large current account deficit and low foreign exchange reserves.

Moody's notes that Ghana's key credit strengths include the economy's strong growth potential as a result of its abundant natural resources, further supported by the development of its oil and gas potential.

While the economy is small, it is more diversified than most single-B and Ba-rated peers, with the services sector contributing half of GDP. The rating is further supported by its long track-record of political stability and high level of democratic governance.

However, the outlook on Ghana's rating is negative and reflects Moody's expectations that the fiscal deficit for 2014 will come in well above the government target of 8.5% of GDP, and could reach double-digits for the third year running on account of optimistic revenue projections.

Downward-pressure on the rating could arise from sustained high or rising fiscal deficits and government debt burden; a persistent decline in oil, gold or cocoa prices that would put downward pressure on fiscal revenues and export receipts; or diminished access to foreign investment or portfolio capital, which would elevate debt rollover risk and aggravate debt-servicing costs.

In contrast, a return to a stable outlook on Ghana's sovereign ratings could develop if acceleration in fiscal consolidation progressively reduces the government's debt burden over the medium-term.

Other drivers could include a substantial bolstering of Ghana's foreign-exchange and/or fiscal reserves that would reduce the country's vulnerability to domestic or external shocks, as well as a strengthening of FDI inflows as a source of funding for the country's external imbalance.