The Dean at the University of Cape Coast Business School (UCCBS), Prof. John Gatsi has indicated that the assertion that credit agencies are biased towards African countries is not entirely true.
This comes after the President of the Republic of Ghana, H.E Nana Addo Dankwa Akufo-Addo accused leaders in the international financial market of bias during his speech at the United Nations General Assembly on Wednesday.
“It has become clear, if ever there was any doubt, that the international financial structure is skewed significantly against developing and emerging economies like Ghana. The avenues that are opened to powerful nations to enable them take measures that would ease pressures on their economies are closed to small nations.
“To make matters worse, credit rating agencies have been quick to downgrade economies in Africa, making it harder to service our debts. The tag of Africa as investment risk is little more than, in substance, a self-fulfilling prophecy created by the prejudice of the international money market, which denies us access to cheaper borrowing, pushing us deeper into debts,” President Akufo-Addo said.
Speaking to Starr FM on the assertion today, Prof. John Gatsi said the issue goes beyond unfavourable terms given to African countries by credit agencies on the international market.
According to him, the corruption and power-drunk nature of African leaders is the bigger problem, an issue he says the International Market has become aware of.
“In 2000 and 2001 the International market led by the IMF and World Bank granted debt forgiveness and many other packages in terms of managing their debt. As soon as African countries got out of the HIPC initiative they were doing worse than what led them to apply for the HIPC initiative.
“The market is aware of the corruption and the power-drunk nature of most African countries and their leaders. The market is aware of how they don’t take any instruction even from the World Bank in their fiscal management. They (International market) know how they (Africa) conduct their elections,” Prof. John Gatsi argued.
He said the IMF is also aware of the misappropriation of funds by African countries and that is why the fund requested an audit of Ghana’s Covid-19 expenditure after providing support to help the country combat the pandemic.
“They know how they spend State money to win elections and after that they go back to difficulties. The market is aware that when we borrow we do not show value for the borrowing. We borrow for things that are not necessary.
“The IMF is not satisfied with the way African countries including Ghana spent the COVID money. To the extent that in the Article 4 Registration report in 2021 they demanded Ghana to do COVID-19 expenditure audit,” the UCC Business School Dean shared.