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12.03.2009 General News

Ghana losing positive credit rating

By myjoyonline
Ghana losing positive credit rating

A private economic consultant, Mr. Felix G. Tettey-Fio has bemoaned the sliding credit rating of the country.

He said the situation was worrying as it will impair the country's attractiveness as an investment destination.

Mr. Tettey-Fio was speaking at a forum organised by the Private Enterprises Foundation to review the 2009 budget and economic policy statement.

He said as a result of the development, the country will pay more if it borrows from the international capital market.

That, according to him puts, a strain on the economy and its managers and called for pragmatic steps to reverse the trend.

He warns that the global recession has serious consequences for Ghana, explaining dwindling foreign exchange earning will be recorded due to low demand for the country's exports.

“Projected revenue may not also come on stream because our industries are becoming distressed and may therefore not be able to pay their taxes.”

Mr. Tettey-Fio said as a result of the issues catalogued in the preceding, the government must cut down the public sector wage bill.

He suggests the targeted real GDP rate should also be reviewed downwards to 4.5 per cent.

If Ghana is to get out of its economic doldrums, it must pay attention to the Small and Medium Scale Enterprises.

This is because they have a potential to reduce unemployment to the bearest minimum.

He advised government against heavy borrowing from domestic sources saying that stifles the private sector of much needed credit.

The economic consultant expressed regret at the high level capital flight in the country.

He said he had learnt with sadness that foreign companies engaged foreign contractors to undertake minor jobs for them.

That, for him, is unacceptable and adds to Ghana's economic woes in terms of managing the stability of the cedi.

Contributing to the discussions, the Deputy General Secretary of the General Agricultural Workers Union, Mr. Edward Kareweh said the current global crunch was a blessing to Ghana.

He said the crisis demonstrates clearly that taking instructions as to the direction of economies from the developed countries is a big mistake.

“This is because all their economic theories have failed them and this means we should start looking for domestic solutions to our economic problems.”

Mr. Kareweh said much as government's intention to modernize agriculture was welcome news, efforts in that sector must include changing the trade policy.

“If the agric sector grows and our trade policies remain the same, they will negate the growth. The concept of government has no business in business is faulty,” he emphasized.

Supporting his arguments, the representative of the Ghana National Poultry Farmers Association, Mr. Kenneth Quartey said the association wanted to see a different trade policy direction.

He said if the trade imbalances were not checked, the agric sector will continue to wallow in absolute despondency.

Story by Malik Abass Daabu