A Deputy Minister of Finance, Mona Quartey has described as “speculative” and “pessimistic” the recent downgrade of Ghana’s credit rating by Standard and Poor’s (S&P).
According to her the downgrade does not reflect recent successes chalked by government in stabilizing the country’s macro economy.
Ghana’s credit rating has been downgraded further into “junk” territory of B- on concerns that access to financing will continue to be a challenge, even if the nation enters an International Monetary Fund (IMF) programme.
[contextly_sidebar id=”TiZARioBIhJ2VSL4PgtOkY2tWo8cXQJy”]But the deputy minister insists that the international rating agency got it all wrong.
“The short term outlook was stable and they didn’t downgrade us on that. We kept our rating and that was fine and that is why we have our challenges so I’m glad that, that did not change,” she remarked.
Ghana’s economy has been struggling with huge budget deficit, high inflation rates, huge wage bill, rising cost of living and huge public debt.
The Ghana cedi until recently had also depreciated significantly against major trading currencies.
These challenges coupled with others compelled government to initiate discussions with the International Monetary Fund (IMF) for a bailout and also to augment the nation’s home grown policies.
According to the deputy minister “with respect to the long term, it looks like S&P was looking at the worst case scenario where we will still have high inflation which as at today is subsiding because we know that consumer price index with respect to food that came out had come down a bit so clearly inflation is not heading north but heading south.”
On the issue of the cedi, Mona Quartey argued that “we all know that since August the Ghanaian cedi is appreciating and not depreciating and it’s looking to stabilize.”
“They also looked at the large fiscal deficit we claim but we know that we have been doing a lot work on strengthening our fiscal position therefore am not sure that we are going to see wider deficit in the longer term I think that is purely speculative,” she added.
Meanwhile, Moody’s Investors Service in June 2014 also downgraded Ghana’s sovereign rating from B1 to B2 because of the country’s rising debt burden and deteriorating debt affordability.
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By: Godwin Allotey Akweiteh/citifmonline.com/Ghana