Open Letter To The President: Current Ghana S&P Global Results Are Not Economic Ratings As Perceived By NPP

The Author

Dear President Nana Akufo Addo,
I would like to bring to your attention concerning the misleading public announcements by your economic team, with respect to the recent publication on S&P Global ratings report. The result has been misinterpreted as a reflection of Ghana’s strong economic foundation, which is not the true explication. Based on my investigations from the S&P headquarters with the attached evidence, the ratings have nothing to do with Ghana’s economy.

I am Solomon Owusu, a citizen vigilante who cares for the nation, a strong NPP member and a mining engineer based in Colorado, USA. Based on the clarification I received from one of the senior rating analysts of S&P Global, Shokhrukh Temurov, I write to debunk the lies thrown in the public domain to deceive the good people of Ghana about the economy. Instead, your team should work assiduously to solve the current deteriorating economy the country faces.

As a concerned Ghanaian and considering the current economic hardships the citizens currently go through, I sent an email to S&P Global headquarters to enquire about the details of the ratings report and the modalities they used to obtain the research data in terms of source, acquisition procedures, the quality assurance and quality control (QA/QC) methodology applied in the process.

In response, Shokhrukh clarified to me by discrediting the controversial perception published to purposely deceive Ghanaians. According to him, the ratings have nothing to do with the adjudged reflection of Ghana’s strong economic fundamentals and hence, the NPP government should stop embarrassing itself with the blatant lies.

In practicing your advice as a citizen and not a spectator, I would like to plead to you, Nana Akufo Addo and the Vice, Dr. Bawumia to put pragmatic measures in place to address the recent economic situation Ghanaians are experiencing under your watch. Please, Ghanaians voted massively for you to alleviate them from hardship and destitution, hence, we are looking forward to seeing action without further excuses. Please read the email response from Shokhrukh below. Thank you.

Solomon Owusu
(Email: [email protected] , Phone: +13038803237 )
Dear Solomon,
First of all, we thank you for the email and your interest in our rating action on Ghana.

Before directly addressing the issues raised, I would like to take this opportunity to explain S&P Global Ratings’ Rating Definition.

Our ratings are not economic ratings nor they reflect a country risk. Rather, sovereign ratings assess sovereign government's ability and willingness to service its financial obligations to nonofficial (commercial) creditors. Although economic wealth level and exchange rate volatility are among factors our credit analysis rests on, they are not the only determinants of our ratings.

As we noted in the research update, Ghana's income level, as measured by its GDP per capita remains at low levels, below US $2000. Although low levels of economic wealth might speak to “economic hardships” you flagged, our credit analysis considers this factor from a different perspective. (And this is a key to understand, because sovereign ratings are more than an economic risk). We view that with low income level, Ghana has limited potential tax and funding bases upon which to draw, which hence constrains its creditworthiness. And such a risk is explicitly factored in our economic assessment. The research update also notes as a downside risk that we could lower our ratings in future if Ghana's economic growth is significantly lower than we expect.

In terms of data we use for the research, we obtain them from official sources. During our mission in the country, we discuss data in detail with all related parties (Ministries, Central Bank, government agencies, commercial banks and key enterprises) . Besides, in the process of credit analysis, we also meet non-governmental international organizations, including International Monetary Fund, World Bank among others. Our discussions with them also help us ensure that the quality of data is adequate for surveillance and that they correspond to the observed reality.

We should note that Ghana’s sovereign ratings still remain in one of the lowest rating categories, despite the recent upgrade. The rating has primarily been moved due to the monetary factors, and fiscal and external risks remain weaknesses.

I hope my email will be helpful. If you have any other question, please let us know

Regards,
Shokhrukh
Shokhrukh Temurov, CFA
Rating Analyst
Sovereign and International Public Finance Ratings
S&P Global Ratings
Level 5, Building 1
DIFC, The Gate Precinct
Dubai, UAE
P.O.Box 506650
T: +971 4 372 7167
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www.spglobal.com
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