Former Finance Minister, Seth Terkper, has warned Ghana’s credit rating will suffer further downgrade following a B- negative outlook rating from Fitch.
In spite of the downgrade from Fitch, which is the worst since the Former President Kufuour’s administration, Finance Minister Ken Ofori-Atta has insisted that the fundamentals of the economy remain strong.
But Speaking on Morning Starr with Francis Abban, Mr. Terkper stated the country’s ballooning debt levels and consequent interest payments will push Ghana’s ratings further down thus increasing cost of borrowing.
“We should brace ourselves for ratings from Moody, Fitch, S&P because these three agencies always follow each other. They rate Ghana, they rate our sovereign and our reserves and the rest.
“Those who are going to give you ordinary loans are looking at the health of your economy and they take ratings on those who have global experience because they cover advanced countries, middle income countries, lower middle income countries like ourselves,” he stated.
Mr. Terkper continued “So when they rate you and your rating is not good, then the market of those who you would want to borrow have these things and would say things are not going well. They perceive that there is risk to give you money just like your neighbor you go to him two three times, the fourth time he might not give you if you are not paying.”
Touching on government’s decision to cut 2022 expenditure by 20 million cedis, the former finance minister advised the government to reconsider funding of its free SHS program and payment of allowances for teacher trainees.