Skip to main content

Ghana risks downgrade by rating agencies

                                                  Nana Akufo-Addo- President of Ghana

By: Emelia Essumanba- Josiah- Daily Express

Groupe Nduom (GN) Research has urged government to instantly carry out policies to restructure the economic system following the country’s possible downgrade by credit rating agencies during their periodic assessment of economies in Africa.

According to recent publications by Standard & Poor, Ghana was rated B- with a stable outlook, Moody's rated Ghana B3 with a stable outlook and Fitch's credit rating for Ghana was a B with negative outlook.

This, GN Research believes is as a result of the country’s poor economic performance in managing its debt stock, currency, and high budget deficit as well as falling foreign direct investment coupled with low commodity prices could be the debilitating factors.

The report signed by Samuel Kofi Ampah of GN Research revealed that implications of such actions can affect the country’s ability to attract foreign direct investment as it gives investors signals of macroeconomic challenges. He added that it also defeats policy credibility, especially when credibility tags are against the previous administration's failure to achieve economic and political leadership. Arguably, the most challenging stress about Ghana could be the morality to increase the debt stock levels above the 71% of GDP at a high price.

Recent statistics from the Bank of Ghana showed that Ghana’s total debt increased from GHc109.4 billion in August 2016 to GHc119.9 as at November 2016, representing 71.9% of GDP. This showed that between August 2016 and November 2016, Ghana’s debt stock had increased by GHc10.5 billion. In addition to the debt issues, the budget deficit for the fiscal year of 2016 is estimated to be about 7%, higher than the targeted 5% and the 6.3% recorded in 2015.

Other reasons given by the report for Ghana’s possible downgrade are the fall in foreign direct investments (FDI), depreciation of the Ghana Cedi and high currency risk.

GN Research suggested that much attention must be paid to the fiscal deficit and the rate at which the country borrows.

“Steps must be taken now to restructure the country’s debts and renegotiate interest payments if possible. Also, the situation where state corporations borrow on central government’s budget must be reviewed. These corporations must be managed efficiently and be made to borrow on their own accounts to reduce the country’s obligation to creditors”, the report stated.

Concluding, the report said Government must also control its expenditure and find sustainable ways of increasing revenue other than borrowing adding that the central bank must play its role effectively to reduce inflation, interest rates and stabilize the currency to improve the outlook for the economy.


Popular posts from this blog

Deputy AG sues Facebooker over 'malicious' Ameri deal

The Deputy Attorney-General and Member of Parliament for Bolgatanga East, Mr Dominic Ayine has filed a defamation suit at an Accra High Court against a Facebook commentator, Evron Hughes.
In Mr Ayine’s statement of claim, sighted by Graphic Online, he accused Mr Hughes of defaming him in a post he authored and published on Facebook on December 21, 2015, titled “RE: AMERI TRANSACTION”.
According to the Deputy A-G, the “false and malicious” post has provoked “public disaffection” against him and exposed him to public ridicule and contempt.
Describing Mr Hughes as a “self-styled social media blogger and a social commentator”, Mr Ayine said the Facebook post had brought his hard-won reputation “as a respected politician, teacher and lawyer” into “hatred, ridicule, odium, discredit, contempt, opprobrium and reproach”.
The Deputy A-G said the “defamatory words” were authored with the sole intent to reduce him in the estimation of all right thinking Ghanaians, adding that he had received numerou…

Meet Ghanaian female shoemaker

The Saint Ozwald shoe brand

By: Fred Yaw SARPONG
The Daily Express

From her humble beginning in Sunyani in the Brong Ahafo region, a senior high female graduate from the Twene Amanfo Senior high in the Brong Ahafo Sunyani and a Ghanaian now boasts of being one of the most popular Made-in-Ghana shoe brands and has the most number of celebrity endorsements.
Sandra Ozwald, CEO of Saint Ozwald

After Sandrah Ozwald completed school in 2013, her parent couldn't have enough money to help her continue school so she planned to do something for herself by selling ice cream, groundnut cakes or food. Back at the senior high, Sandra used to make groundnut cakes, condensed toffees and ice cream to support herself since her mother couldn't provide all for her.

With 12 siblings and the only girl child (2nd born) among them, and whiles planning which of these to sell, Sandra attended a friend’s wedding and the grooms shoe looked so attractive to her.

According to her, the groom’s shoes were Ma…