A Deputy Minister of Finance, Mona Quartey has described as “speculative” and “pessimistic” the recent downgrade of Ghana\u2019s credit rating by Standard and Poor’s (S&P).<\/p>\n
According to her the downgrade does not reflect recent successes chalked by government in stabilizing the country’s macro economy.<\/p>\n
Ghana\u2019s credit rating has been downgraded further into \u201cjunk\u201d territory<\/a><\/strong><\/span> 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.<\/p>\n [contextly_sidebar id=”TiZARioBIhJ2VSL4PgtOkY2tWo8cXQJy”]But the deputy minister insists that the international rating agency got it all wrong.<\/p>\n \u201cThe short term outlook was stable and they didn\u2019t downgrade us on that. We kept our rating and that was fine and that is why we have our challenges so I\u2019m glad that, that did not change,\u201d she remarked.<\/p>\n Ghana’s economy has been struggling with huge budget deficit, high inflation rates, huge wage bill,\u00a0 rising cost of living and huge public debt.<\/p>\n The Ghana cedi until recently had also depreciated significantly against major trading currencies<\/a><\/strong><\/span>.<\/p>\n These challenges coupled with others compelled government to initiate discussions with the International Monetary Fund<\/a><\/strong><\/span> (IMF) for a bailout and also to augment the nation\u2019s home grown policies.<\/p>\n According to the deputy minister \u201cwith 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.\u201d<\/p>\n On the issue of\u00a0the cedi, Mona Quartey argued that \u201cwe all know that since August the Ghanaian cedi is appreciating and not depreciating and it\u2019s looking to stabilize.\u201d<\/p>\n \u201cThey 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,\u201d she added.<\/p>\n Meanwhile, \u00a0Moody\u2019s Investors Service in June 2014 also downgraded Ghana\u2019s sovereign rating from B1 to B2<\/a><\/strong><\/span> because of the country\u2019s rising debt burden and deteriorating debt affordability.<\/p>\n –<\/p>\n By: Godwin Allotey Akweiteh\/citifmonline.com\/Ghana<\/p>\n