Ghana’s president Nana Addo Dankwa Akufo-Addo has asked Ghanaians to have confidence in him as he believes his government will fix the economic hardship in the country soon.
“Yes, the difficulties are there” but added: “I want to minimize the difficulties that are affecting the lives of ordinary people in a very negative way”.
“What I am saying to the people of Ghana is that they should continue to have confidence”, the President told a local radio station in Tamale, Northern Region, during his tour of that part of the country.
On Friday, 5 August 2022, S&P Global Ratings downgraded Ghana’s foreign and domestic currency sovereign ratings to CCC+/C from B-/B, further pushing the country’s debt into speculative territory.
According to S&P, Ghana’s limited commercial financing choices and restrictive external and fiscal buffers are the reason for its unfavourable outlook.
According to S&P, the Covid-19 pandemic and the Russian conflict have made Ghana’s fiscal and external imbalances worse.
The agency noted that a number of factors, including nonresident withdrawals from domestic government bond markets, dividend payments to overseas investors, and increasing prices for refined petroleum products, have increased demand for foreign currency.
According to the agency, the country has also been hampered by a lack of access to the markets for Euro bonds.
Among other things, local governments have approved laws to limit tax exemptions, notably for VAT, and to impose a fee on electronic transactions. The situation remains difficult, and for the first half of 2022, the budget deficit exceeded the government’s aggressive objective, according to S&P, even though these changes “may boost the tax take moving forward.”
In February, S&P had upheld Ghana’s ratings while Moody’s had lowered the African country to Caa1 with a stable outlook.
Mr Akufo-Addo, however, said his government “is determined to work its way through the economy”.
“We did it when I first came into office and I am determined and strongly of the belief, that we can do it again because the policies are sound and are about putting Ghana in a strong place,” the President noted.
Source: Mybrytnewsroom.com/Joseph Asare
