“You can see that things are not on track. Even before these rating agencies came in. If you look at some of our indicators, they are not good. About 49 per cent of our revenue is used to service debts. When President Nana Akufo-Addo came in, we can see that our debt has ballooned by some ghc200 billion. These are just palpable facts that show that the economy is not on track,” an Economist, Bismark Osei has said.
He made these comments on A1 Radio’s Day Break Upper East on the back of the government’s displeasure about the low credit ratings of the Ghanaian economy by international rating agencies.
Mr. Osei argued that government displeasure and rejection of the ratings of the economy is unwarranted as the evidence for the downgrades are evident for all to see.
He was unhappy about government’s extensive capital expenditure and what he termed as profligate spending adding that, “even putting these credit agencies aside, the facts are there for us to know. How can you use 49 per cent of your revenues to pay debts and interests? This defeats the key tenets of achieving economic variance and prudence”.
The Economist described as ‘lies’ the president’s narrative that there is a deliberate attempt by international credit rating agencies to thwart the fundraising efforts of African countries.
He insisted that the rating agencies have very clear guidelines which include but are not limited to debt to GDP ratio, revenue mobilisation and import variables.
“If you look at our debt to GDP, it shows that our ratings are not credible,” he insisted.
Mr. Osei explained that while the theory that there is an agenda against African countries is deliberately false, government concerns to some extent are valid.
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“Government has taken some steps that will help us achieve fiscal consolidation and Moody’s and other agencies should have taken those things into cognisance. The government has cut down the expenditure of MMDAs by 20 percent. Also, the tax exemption bill is going to be reviewed so that we can reduce these exemptions that make us lose revenue. The E-levy is also onboard. These are all measures that should have been incorporated into their estimations,” he argued.
Mr. Osei called on government to quit demonizing the credit agencies.
A1radioonline.com|101.1 MHz|Mark Kwasi Ahumah Smith |Bolgatanga|Ghana
