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Fitch said on Thursday that it had downgraded Ghana's debt rating to "B" from "B+" due to concerns over its rising deficit.
Ghana's budget deficit jumped to 11.8 percent of GDP from 4 percent in 2011, largely due to a high government wage bill and a costly presidential election.
"The authorities continued to overrun on wages, interest costs and arrears, leading Fitch to expect that the government will fail to meet the 9 percent of GDP fiscal deficit target for this year," the ratings agency said in a statement.
Fitch in February downgraded Ghana's outlook from "stable" to "negative," citing the government's announcement that the deficit to GDP ratio in 2012 had jumped almost 100 percent over its estimate for the year.
"Policy credibility has been significantly weakened, following two years of larger-than-expected budget deficits," the agency said in today's statement.
The world's second-largest producer of cocoa and Africa's second-largest producer of gold, Ghana has experienced rapid economic growth in the years since oil production started in 2010.
Ghana is producing around 110,000 barrels of oil per-day, which brought in $541 million to the government last year.
When production began at the offshore Jubilee field in December 2010, it was expected to generate up to $1.0 billion in government revenue per year.
The country's economy grew a staggering 14 percent in 2011 and eight percent in 2012.
President John Dramani Mahama was elected last year in polls that were disputed by the leading opposition party and resulted in a lengthy legal battle in the supreme court that ended with the win being upheld.
Fitch applauded Ghana's peaceful handling of the elections and said the government's decision this year to raise electricity tariffs and cut fuel subsidies would help stabilise the deficit.
Fitch said it expects Ghana's GDP to continue to grow at an average of 6 to 7 percent in the medium term. It also predicted that oil production would reach 200,000 barrels per-day by 2017.