* Ghana seen as one of Africa's brightest economic prospects
* Fitch cites concerns about deficit, debt
* Ghana finance minister says downgrade is not fair
* Ghana to keep tight monetary policy -central bank governor
Fitch ratings agency downgraded Ghana's sovereign credit ranking on Thursday saying the government was overspending, a move that could raise the borrowing costs of the rapidly-growing economy.
Ghana, which produces gold, cocoa and oil, is seen as one of Africa's brightest economic prospects with a stable democracy and an economy that grew at 8 percent in 2012. Its finance minister called the downgrade 'unfair'.
But economists have voiced growing concern about the risks posed by a high budget deficit and rising debt.
"Ghana's creditworthiness has been further weakened by the government's failure to fully implement its fiscal consolidation plan in 2013," Fitch said in a statement after it cut Ghana's rating deeper into 'speculative' territory, to B from B-plus. It said the outlook was stable.
"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 (gross domestic product) fiscal deficit target for this year," the rating agency added.
Ghana's fiscal troubles were exposed in February when President John Mahama's government announced that its deficit grew in the 2012 election year to 12.1 percent, nearly double the target. The figure was revised to 11.8 percent.
Since then, authorities have begun to implement a multi-year plan to bring the deficit down to 6 percent by 2015. It hopes to hit a 2013 target of 9 percent aided by cuts to fuel and utility subsidies, and a bid to increase tax revenues.
Finance Minister Seth Terkper said the downgrade failed to take into account these reforms.
"(Fitch's decision) is not fair because it does not acknowledge the very serious fiscal consolidation efforts that we announced in the budget and which we are implementing," Terkper told Reuters by telephone.
Economists say macro-economic instability and the fact that the country of 25 million is likely to miss a raft of economic targets this year could weigh on Ghana's GDP growth, and Terkper acknowledged he expected 2013 growth to come in at 7.5 percent, below the initial 8 percent forecast.
However, Razia Khan, head of Africa research at Standard Chartered bank, said the downgrade was a "little flawed" given the consolidation efforts underway and the fact that issues like high public sector wage bills would take time to tackle.
"The authorities have made substantial progress in trying to tackle the budget deficit," Khan said, citing its decision to drop subsidies as one example.
The downgrade came after trading ended on Thursday. Ghana's cedi currency, down almost 14 percent this year, had earlier held steady at 2.1750 to the dollar, according to a Standard Bank trader. Dealers said Ghana Stock Exchange remained flat.
Central bank Governor Henry Kofi Wampah told Reuters after the Fitch statement that Ghana will keep monetary policy tight and expects increased inflows from oil and gas production to help stabilise its finances in early 2014.
"The combination of monetary policy and increased flows from the external sector as well as the fiscal consolidation going forward are factors that we believe will normalise the situation and ease pressure on the markets," he said by telephone.
He cited oil and gas production as well as receipts from donors.
One likely impact of Fitch's decision will be to raise the cost of future borrowing.
Ghana raised $750 million in Eurobonds in July and the government says it will go back to the foreign debt market next year to raise money for specific infrastructure projects in the power sector.
The opposition New Patriotic Party (NPP) said the downgrade was proof of economic mismanagement. "Already we are reeling under huge debts," NPP finance spokesman Mark Assibey-Yeboah told Reuters.
Standard & Poor's already rates Ghana B, while Moody's rates it a notch higher at B1. Both give a stable outlook.