S&P Rating Affirms Improved Fundamentals – Oppong Nkrumah
The government views Ghana’s recent credit rating upgrade by the international rating agency, Standard & Poor’s, as a marker of improving fundamentals.
“It [the rating upgrade] is in our view an affirmation of what we have been touting and arguing for the last about six months, within which period we had completed our first year of work,” the Information Minister, Kojo Oppong Nkrumah, said on the Citi Breakfast Show.
The Minister also said “generally it is feedback, it is an affirmation of what we have been talking about and our desire is to keep working at it to a point where we even see a further upgrade and most importantly a translation of that to meet the aspirations of a majority of our people.”
“The things that we would, maybe at home, call fundamentals… has significantly improved, particularly on the monetary and macro side and they are therefore of the view that if anybody is looking for a strong investment destination that is stable and is able to yield very strong ground and good returns, Ghana is that viable location.”
Standard and Poor’s raised its long-term ratings on Ghana to ‘B’ from ‘B minus’. The agency also said the outlook on Ghana was stable.
A statement on the latest stance by Standard and Poor’s attributed the rise to improving banking sector stability as well as lower inflation.
Standard and Poor’s also explained that the improvement in inflation and banking stability also indicated the effectiveness of the central bank’s monetary policy.
However, Standard and Poor’s report also noted sizeable contingent liabilities, weak public finances, low GDP per capita and high debt levels. Mr. Oppong Nkrumah remarked that this was also in line with signals from the government.
“We are not out of the woods yet… there is still a lot of work that has to be done particularly on the fiscal side,” he said.
The Minister added that “the reality is that there is a lot of economic activity that is not captured into the fiscal account because a lot of people still evade paying their taxes.”