Credit Ratings: You can’t accept the praises and refuse the criticism – Economist tells Akufo-Addo

President Akufo-Addo

An Economist at the University of School (UBGS) Dr Patrick Essuming has stated his challenge with the position taken by President on the downgrade of Ghana's by credit rating agencies.

President 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'.

said at the 30th Annual Meeting of the Afreximbank on Sunday, June 18 that “the 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 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.”

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