An Economist at the University of Ghana Business School (UBGS) Dr Patrick Essuming has stated his challenge with the position taken by President Nana Addo Dankwa Akufo-Addo on the downgrade of Ghana’s economy by credit rating agencies.
President Akufo-Addo had described the downgrade as ‘reckless’.
He said the downgrades exacerbated the challenges in African countries including Ghana.
Fitch Ratings, for instance, in April this year downgraded Ghana’s Long-Term Local-Currency (LTLC) Issuer Default Rating (IDR) to ‘RD’ from ‘CCC’.
President Akufo-Addo said at the 30th Annual Meeting of the Afreximbank on Sunday, June 18 that “the AU champion for African financial institutions and leader of a country that recently had to deal with one of the most difficult periods in his post-independent history, difficulties that were exacerbated by the reckless behaviour of rating agencies that engaged in pro-cyclical downgrades that shut Ghana out of the capital market and turned a liquidity crisis into a solvency crisis.”
He further indicated that relying on borrowing for development in African countries comes with challenges.
He said it is risky and costly.
To that end, he is calling for the strengthening of African financial institutions and their ownership in order to provide financial support to African countries at a low cost.
Reacting to this on News 360 on TV3 Monday, June 19, Dr Essuming said “The challenge with the President’s position is that when at a time the same rating agencies have upgraded you and you have used that as a sign that you are managing the economy well, you can’t turn around when the same criteria or the same institutions are downgrading you and start lambasting them.
“So I think that this is the problem because you cannot accept the praise and refuse the criticism.”
