"Concerns raised by investors over Ghana’s debt exaggerated

" \n Concerns raised by investors over Ghana's debt exaggerated - John Kumah \n \n\n \n The Deputy Minister of Finance, John Kumah, says concerns raised by investors over Ghana\u2019s ability to stabilise its debts have been exaggerated. \n \n\n \n International ratings agency, Fitch, has downgraded Ghana\u2019s Long-Term Foreign-Currency Issuer Default Rating (IDR) to \u2018B-\u2018 from \u2018B\u2019 with a negative outlook. \n \n\n \n The downgrade of Ghana\u2019s IDRs and Negative Outlook reflect the sovereign\u2019s loss of access to international capital markets in the second-half of 2021, following a pandemic-related [COVID-19] surge in government debt. \n \n\n \n Fitch in a report said \u201cthis comes in the context of uncertainty about the government\u2019s ability to stabilise debt and against a backdrop of tightening global financing conditions. In our view, Ghana\u2019s ability to deliver on planned fiscal consolidation efforts could be hindered by the heavier reliance on domestic debt issuance with higher interest costs, in the context of an already exceptionally high-interest expenditure to revenue ratio.\u201d \n \n\n \n But speaking in an interview, Mr John Kumah said Ghana has been unfairly treated. \n \n\n \n \u201cWe sincerely believe that the concerns are being exaggerated and that Ghana particularly in this instance is being unfairly downgraded especially if the basis of the downgrade or concerns being raised is about the budget. \n \n\n \n \"Let us understand that this economy recovering from Covid-19 last year, has grown on an average of 5.2 per cent,\" he stated. \n \n\n \n He added that the Ghana Revenue Authority has over the years been able to raise more revenue than its target resulting in the continuous growth of the economy. \n \n\n \n \u201cIf you check the first-quarter growth from 2021, it was 3.3 per cent. Then we did 3.9 per cent. In the third quarter, Ghana grew by 6 per cent. We don\u2019t have the fourth quarter yet but we all know that due to the Christmas festivity, the fourth quarter will be the highest. \n \n\n \n \"So if you take the average of the three quarters there is 5.2 per cent. The growth rate target for 2021 was 5 per cent. So if you are doing 5.2 per cent, it means you are doing well. Our budget deficit for last year was 9.4 per cent which I think we did 9.5 per cent, slightly above it. \n \n\n \n \"If you look at our revenue targets, GRA was given a target of GH\u00a257 billion, they ended up collecting about GH\u00a257.3 billion. So it is an economy that is growing above 5 per cent, meeting its revenue target,\" he remarked . \n \n\n \n \u201cWe don\u2019t see the basis for such an exaggerated concern,\" he added. \n \n\n \n According to Mr Kumah, the misunderstanding may be as a result of the impasse on government\u2019s E-levy Bill in Parliament that seeks to widen the country\u2019s net tax. \n \n\n \n \u201cExcept to say that it is because of the E-levy impasse in Parliament, because of the nature of Parliamentary strength which is equal. So they are not sure about how our revenue targets are going to go in 2022, otherwise, we don\u2019t see the very basis and the fears.\u201d \n \n\n \n Meanwhile, the Finance Minister, Ken Ofori-Atta has said that the Electronic Transaction Levy (e-Levy) Bill will be resubmitted when Parliament reconvenes on January 25, 2021. \n "

"Concerns raised by investors over Ghana’s debt exaggerated

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