S&P Rating: Nobody in this Gov’t has said the economy is doing well

A member of the New Patriotic Party (NPP)’s Communication team, Mr Denis Miracle Aboagye has reacted to S & P Global Rating’s current rating on the economy outlook of Ghana.

S&P Global Ratings, an American credit rating agency in its latest report has downgraded the country’s credit worthiness from B-/B to CCC+/C.

They also reviewed the country’s economic outlook to negative, reflecting “Ghana’s limited commercial financing options, and constrained external and fiscal buffers.”

“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, ” 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.

Speaking on Big Issue on TV3 NewDay on Monday, August 8, monitored by GhanaPlus.com, Mr Aboagye said government has consistently admitted that the economy has fundamental challenges however, government is doing its best to address them.

“Now on the S& P ratting, I think nobody in this government has said that our economy is doing well. Nobody has done that. If you follow the President’s State of the Nation’s Address. If you followed Dr Bawumia’s address and all of that you will realize that everybody in government consistently has admitted that our economy has a fundamental challenge,” Mr Aboagye said.

“We admitted that the debt to GDP is quite high. We done a lot of borrowing as against our expenditure and as against the revenue that we are getting in and the challenge keeps going up and so we need to find strategies to reorganize ourselves and restructure and so that is why government went on a tangent of encouraging us to begin to look at how we can increase our domestic revenue mobilization to be able to take care of ourselves and reduce the borrowing,” he added.

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