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General News of Tuesday, 18 September 2018

Source: citinewsroom.com

Don’t jubilate yet over ‘B’ rating – Fiifi Kwetey predicts doom ahead

A former Deputy Finance Minister and Member of Parliament for Ketu South, Fiifi Kwetey, is predicting doom for Ghana as the country prepares to enter into the last two years of the Akufo-Addo government.

He says Ghanaians should not jubilate yet despite Ghana’s credit rating upgraded to B by international credit rating firm, Standard & Poor’s.

According to him, precedents have shown that although successive Ghanaian governments sometimes get good ratings they usually struggle within the last two years of their administration.

“We tend to achieve but we are unable to sustain because so many things really make it difficult for us to sustain. So I will say that it will not be much cause for too much celebration because we’ve seen even much higher performance such as B+ not too long ago,” he said in an interview on Eyewitness News on Monday.

Mr. Kwetey made the statement in relation to an upgrade of Ghana’s rating by Standard & Poor’s linked to “improved monetary policy effectiveness” and stable economic outlook.

S&P said its upgrade of Ghana’s rating reflects its assessment that “Ghana’s monetary policy effectiveness has improved, albeit from a low base, and will support the credibility of the inflation-targeting framework over the period.”

But instead of jubilating, government should instead focus on addressing revenue shortfalls and other challenges that would not allow for the sustenance of the mark S&P had given Ghana, Fiifi Kwetey cautions.

“We’ve gone through a bit of it. We’ve seen the likes of B+ in the past even as recent as 2012 and early parts of 2013. And then moments of difficulties, and I think sometime around 2016 we saw a change of outlook where it moved from negative to positive outlook. So these strings really have happened which do show that after the economy we had so many factors that do not give us the possibility of keeping sustainably very sound fundamentals.”

“So we really should focus more on the challenges that are being pointed because these challenges are substantial. Challenges relating to issues that have to do with revenue…and if you do notice those challenges will get even more when we enter into what I call championship round. It’s just like boxing; first two years of a government tend to be much more relaxation, things are not really as tough. Things get much tougher when we enter into the final two years. That’s when real difficulties will emerge. That is when governments back out of certain things they ought to do. If you look at some of the headwind ahead, you can only say we really need to tighten properly because I see difficulties coming that way,” he added.



Structural reforms needed asap

Also speaking on Eyewitness News, a lecturer at the University of Ghana Business School Professor Godfred Bokpin, called for structural reforms to enable government sustain the rating.

“There is a lot that has to be done in terms of structural reforms that we should be able to carry out quickly in order to situate this progress and make them durable, sustainable to benefit the wider Ghanaian community,” Prof. Bokpin added.

S&P’s B rating doesn’t change hardship in Ghana – Kwakye Ofosu

A former Deputy Information Minister, Felix Kwakye Ofosu, says the upgrade of Ghana’s economic outlook to B from B-, has no bearing on the lives of Ghanaians who are enduring various forms of hardships under the 20-months old Akufo-Addo presidency.

He said the rating does not comfort Ghanaians in any way, and thus charged government to put measures in place to turn things around as promised prior to the 2016 general elections.

“The Standard & Poor’s rating comes as cold comfort for Ghanaians who are reeling under severe economic hardships at a time where the cedi has taken a very steep nose dive and is depreciating at an alarming rate against the US dollar. The last thing on the minds of Ghanaians is our ratings,” he said in an interview with citinewsroom.com.