Govt disappointed in S&P’s economic downgrade – Finance Ministry
The government says it is disappointed by S&P’s decision to downgrade Ghana despite the bold policies implemented in 2022 to address macro fiscal challenges and debt sustainability, which have been significantly exacerbated by the impact of these global external shocks on the economy.
On August 5, 2022, Standard and Poor’s (“S&P”) Global Ratings downgraded Ghana’s foreign and local currency credit ratings from ‘B-/B’ To ‘CCC+/C’ with a negative outlook.
According to S&P, the downgrade is due to intensifying financing and external pressures on the economy.
A statement signed and issued by the Public Relations Unit of the Ministry of Finance in Accra yesterday said S&P in arriving at the decision, did not consider the lingering effects of the COVID-19 pandemic and the severe global shock of the Russian invasion of Ukraine on Ghana and the consequent fiscal and external imbalances.
The statement added that the rating agency also failed to consider the elevated gross financing needs in the face of International Capital Market hiatus, the limited commercial financing options; and the credible steps taken by the government to fast-track fiscal consolidation and the passage of key revenue bills.
The statement said the government would continue to be proactive in addressing the impact of these external and domestic headwinds on the economy and on the lives and livelihoods of Ghanaians.
The government according to the statement had implemented key revenue and expenditure measures, including the 30 per cent cut in discretionary expenditures.
“The delays in the passage of key revenue measures introduced in the 2022 Budget affected revenues performance in the first half of the year. However, all the revenue measures introduced in the 2022 Budget, including the review of the MDA Fees and Charges Bill, the Tax Exemption Bill, the E-Levy Bill, have all now been promulgated by Parliament. These fiscal measures are now in full implementation mode to support our fiscal and debt sustainability policies,” it said.
The government the statement said was committed and was confident that it would successfully emerge from these challenges in the shortest possible time.
“Our current engagement with the International Monetary Fund for a programme, incorporating our Enhanced Domestic Programme (EDP), is expected to support our drive to restore and sustain macroeconomic stability; debt sustainability and promote growth and job creation whilst ensuring social protection to achieve our vision of a Ghana Beyond Aid,” the statement said.