Assemble best brains to dialogue on the economy – Mahama tells Gov’t

Former President and 2020 flagbearer of the National Democratic Congress, John Dramani Mahama has called for a national dialogue on the economy.

According to him, assembling some of the best brains in the country to dialogue on the economy will serve the country well in the face of the current economic difficulties.

Mr Mahama was reacting to the recent downgrading of the country’s economy by  S & P Global Rating in a Facebook post sighted by GhanaPlus.com on Tuesday, August 9, 2022.

“There appears to be no end to the problems with the Ghanaian economy, with the recent downgrade to CCC+/C Junk status.

The steep depreciation of the Ghana Cedi in recent days, clearly shows that the midyear review of the 2022 budget failed to win back the confidence of the investor community and the Ghanaian public.

Unfortunately, no credible remedial plans have been put forward by the government to salvage the economy.

A national dialogue on the economy, bringing some of our best brains together will serve us well, even as we prepare for debt restructuring and negotiation of an IMF programme,” Mr Mahama wrote.

S&P Global Ratings downgrades Ghana’s economy

Ghana’s credit worthiness have been downgraded by S&P Global Rating, an American credit rating agency from B-/B to CCC+/C.

The country’s economic outlook was also reviewed to negative, reflecting “Ghana’s limited commercial financing options, and constrained external and fiscal buffer”

“Demand for foreign currency has been driven higher by several factors, including nonresident outflows from domestic government bond markets, dividend payments to foreign investors and higher costs for refined petroleum products, ” the report argued.

“Local authorities have passed a levy on electronic transactions and legislation to tighten exemptions on tax payments including for VAT, among other moves. While these changes could improve the tax take going forward, the situation remains challenging, and over the first half of 2022, the fiscal deficit has exceeded the government’s ambitious target”, JoyNews reported S&P pointed out.

Fitch, Moody downgrade Ghana’s credit rating

S& P Global Rating becomes the third in a roll, agencies which have downgraded Ghana’s economic outlook this year.

Earlier, Fitch, an international rating agency downgraded Ghana’s credit rating from B to B- with a negative outlook.

A report by the rating agency said “this comes in the context of uncertainty about the government’s ability to stabilise debt and against a backdrop of tightening global financing conditions. In our view, Ghana’s ability to deliver on planned fiscal consolidation efforts could be hindered by the heavier reliance on domestic debt issuance with higher interest costs, in the context of already exceptionally high interest expenditure to revenue ratio.”

Moody, also a rating agency downgraded Ghana’s long term issuer and senior unsecured debt ratings from B3 to Caa1 with a stable economic outlook.

Source: GhanaPlus.com