The recent downgrade of Ghana's credit rating from B to B-negative by the international rating agency, S&P Global, has attracted lamentations from the ministry of finance which has described the development as rather unfortunate.
According to the Ministry, though it acknowledged that the downgrade was global, it found it disturbing that the rating agencies would choose to lower its ratings at a time when economies, including Ghana, were battling an unusual crisis.
A press release issued by the Public Affairs Department of the Ministry of Finance attributed Standard and Poor's low credit ratings to the effects of the pandemic on the global economy.
“Reference is made to a publication by S & P Global Ratings that the Rating Agency had lowered Ghana's long-term foreign and local currency sovereign credit ratings to B- from B and affirmed its B short-term ratings. The outlook is adjudged stable. The COVID-19 pandemic-related expenditures elevated the fiscal policy stance. This was to ensure that we save our people and provide relief to many Ghanaians severely impacted by the pandemic. This was the fundamental reason for the lowering of the rating,” it noted.
“It is very unfortunate that rating agencies will choose to downgrade our countries in these unprecedented times,” the statement added.
The statement further added that, “As the South African Revenue Services Commissioner recently argued: 'While we understand the underlying factors that are pointed out by the ratings agencies, we think that during such a time of crisis, when the whole world is re-calibrating and redefining its economic status, for any downgrades to be issued during this time is like kicking us when we are down'.
It, however, called on “Rating Agencies to seriously consider freezing any rating actions during global pandemics such as COVID-19.”
Among other things, the Ministry said the government was focused on saving lives and livelihoods, and that required some temporary fiscal and economic adjustments, including some one-off expenditures.
“The government chose to save lives and, therefore, instituted temporary life-saving initiatives and interventions aimed at protecting the general population against the negative economic effects of the pandemic,” it said.
“The government also provided credit for micro, small and medium enterprises (MSMEs) whose businesses were most impacted by the lockdown,” it said.
The statement went on to state that in spite of government's interventions, the economic fundamentals remained strong and recovery prospects were high.
That, it said, was reflected in the positive narrative on how Ghana had managed the economy under the pandemic.
The Ministry further noted that the government had a clear path towards the restoration of economic stability in the short to medium term.
It said it would sustain the progress made and accelerate it through the GH¢100 billion Ghana CARES transformation programme within the general policy framework of the Ghana Beyond Aid agenda.