Reverend Kusi Boafo, a senior lecturer at the Kumasi Polytechnic and financial analyst has denounced current ratings of Ghana’s economy by an international credit rating agency. The credit rating agency Moody’s Investors Service (“Moody’s”) just recently affirmed the Government of Ghana’s issuer and senior unsecured rating at B3 and changed the outlook to stable from negative.
Key drivers for the rating were; Significant fiscal deficit reduction and institutional reform implementation over the past year under the umbrella of the 3-year IMF programme starting April 2015.
Reduced government liquidity risk on the external side after the successful issuance of a $750 million Eurobond in September earmarked to redeem the remaining $400 million October 2017 Eurobond maturity; Improved balance of payments dynamics amid continued development of oil and gas resources via higher foreign direct investment (FDI) inflows, supporting reserve buffers and reduced currency volatility.
Speaking to Eugene Akoto Bamfo on Agoo fm’s “Ene nso Biom” Reverend Boafo explained the rating is a process that assesses financial status and strength of a country’s economy, and whether it has the capacity to reimburse both short and long term loans borrowed from the international trade front. It is also a way of scrutinizing the country’s trade policies before loans are disbursed to them.
He said there are countries who according to such international rating are capable of paying back loans they receive for economic growth even after a hundred years and such countries include Norway, Sweden, Switzerland, Australia, Hongkong, Denmark, Singapore and others. Ghana is somewhere in the middle and the rating indicates interest charge on loans a country obtains, reveals risk factors he said.
He called for meticulous analysis on the rating contesting whether the B3 positive rating is really from Moody’s saying “Moody’s rates are not normally like that and I personally cannot accept it”. In Moody’s grading, BA1 to B3 are all speculative so the economic rating cannot be stable he opined and urged Ghanaians to cross check from the agency’s website. He also said per the international rating B3 has never been stable in the entire B column. He however alleged somebody might have fabricated and planted the story in the media and reiterated the need for Ghanaians to confirm from Moody’s website.
Source:Agoo News/ Kofi Boahen Dankwa