President Akufo-Addo accuses rating agencies of recklessly downgrading Ghana
President Nana Akufo-Addo has criticized international rating agencies for unfairly and recklessly downgrading sovereign nations, particularly Ghana, during the Covid-19 pandemic and the Russian/Ukraine war.
According to him, those ratings have impacted negatively on the economies of these countries.
In his keynote address at the 30th AGM of the African Export and Import Bank (Afreximbank), the President said the downgrades of some African economies have completely shut them from accessing the international capital market, which hitherto helped them to raise funds to support their liquidity needs.
President Akufo-Addo contends that challenges in the country’s economy were compounded by the downgrades making it one of the most difficult times in the history of the country post-independence.
“I can comfortably and convincingly say this as the AU champion for African financial institutions and leader of a country which recently had to deal with one of the most difficult periods in his post-independence history, difficulties which were exacerbated by the reckless behaviour of rating agencies that engaged in pro-cyclical downgrades shutting Ghana out of capital markets and turning it’s liquidity crisis into a solvency crisis”.
“The country which had become the favourite child of bondholders and had successfully gone to market at the height of the pre-covid downturn was suddenly shut out of international capital markets,” he noted”.However, he praised Afrieximbank for its timely support that took the country out of many challenges.
“Afrieximbank, under its counter-cyclical response mechanism, provided timely support to help Ghana navigate the macroeconomic management challenges worsened by Russia’s war of aggression in Ukraine in an orderly manner when suddenly, we realized we were alone”.
Meanwhile, the President of the Afrieximbank, Professor Benedict Oramah, has assured of ongoing initiatives to expand banking reach to many citizens since most global banks are exiting the continent.
He also highlighted some successful implementations of new products to make trade on the continent seamless.
On his part, the Minister for Finance, Ken Ofori-Atta, called on the bank to expedite action in ensuring many African countries are out of the current challenges.
Afreximbank, a key player in facilitating trade and economic development in Africa, has taken a significant step by providing $10 billion in funding to establish an adjustment fund.
This fund aims to support countries under the African Continental Free Trade Area (AfCFTA), a landmark agreement to boost intra-African trade and economic integration.
Rating agencies like Fitch, Moody’s and S&P have downgraded Ghana’s creditworthiness and currency to junk status.