Felix Kwakye Ofosu, a former deputy minister of communications, has criticized Vice President Dr. Mahamudu Bawumia for the most recent lowering of Ghana’s credit ratings by Moody’s.
Ghana’s long-term issuer and senior unsecured debt ratings were lowered from Caa1 to Caa2 by the international rating agency Moody’s Investors Service, and the ratings were put under review for a possible downgrade.
Moodys claims that the downgrade reflects the recent macroeconomic deterioration of Ghana’s economy, which has led to further heightened government liquidity issues, challenges with debt sustainability, and a higher probability of default on debt.
“Without external support, the government’s policy levers to arrest a worsening macroeconomic backdrop and heavier debt burden are extremely limited; the government’s small revenue base, large and increasingly absorbed by interest payments, further intensifies the policy dilemma between competing objectives, including servicing debt while meeting essential social needs,” Moody’s said on its official website on September 30, 2022.
Felix Kwakye Ofosu, while reacting to the downgrade in a tweet shared on October 3, 2022, intimated that Vice President Mahamudu Bawumia as the head of Ghana’s Economic Management team is responsible for the economic meltdown.
“Moody’s downgrades Ghana again. This time to Caa2. Bawumia has been an unmitigated disaster and a complete waste of time as head of the Economic Management Team,” the tweet the former deputy minister read.
This is the second time in less than two weeks that Ghana’s credit ratings have been downgraded. The Long-Term Local-and Foreign-Currency Issuer Default Ratings (IDRs) of Ghana have downgraded by the international credit rating agency, Fitch Ratings, on September 23, 2022.
In a release posted on its website (fitchratings.com), the agency indicated that it normally does not give credit ratings below CCC.
“Fitch Ratings has downgraded Ghana’s Long-Term Local- and Foreign-Currency Issuer Default Ratings (IDRs) to ‘CC’, from ‘CCC’. Fitch typically does not assign Outlooks to issuers with a rating of ‘CCC’ or below,” parts of the release read.
The ‘CCC’ rating implies that Ghana is considered a “junk” country in terms of investment and any investor who buys a bond issued by the Government of Ghana is at a high risk of not getting his/her investment.