Economist, Dr. Ebo Turckson has warned that the latest rating of the Ghanaian economy by Fitch is a bad signal to investors.
[contextly_sidebar id=”dzNJzjjXao9HWw7u8NMuK674UYXup7LH”]According to him, the rating paints a gloomy picture of the country’s macro-economic and political environment which determines investments into the country.
“You know foreign investors look at some of these things, these indications, to be able to tell how to do business in the country or even to lend money to the government,” he remarked.
Credit ratings agency, Fitch, has warned that Ghana’s fiscal and external deficits leave the country vulnerable to domestic and external shocks, including low oil prices and tight financing conditions.
It consequently put Ghana’s credit rating at B with a negative outlook.
Fitch, added that the result has been lower growth of 4.1% in 2015 and a public debt to Gross Domestic Product (GDP) ratio of 72%, well above the ‘B’ median of 47%.
The ratings agency, however, warned that fiscal slippage ahead of the November elections would increase inflationary and financing pressures.
It also noted that a further decline in commodity prices would negatively impact growth and exacerbate Ghana’s twin deficits.
Dr. Ebo Turckson however advocated the introduction of measures to address possible imbalances that may arise this year.
“The rating is not too bad but we just have to make sure that we put in place measures to tackle any external imbalances that may arise in this year and minimize the extent to which our stability is thrown off board. If it does happens that way then our credibility rating will drop. But as we speak, it is not too bad for the country, we have done well in 2015 in terms of consolidation. These are the things that feed into the perception of whether the economy is at risk or not,” He stated.
By: Norvan Acquah-Hayford/citibusinessnews.com/Ghana