Tema-Ghana, Dec. 2, MNN – Ghana’s move to secure a financial bailout from the International Monetary Fund (IMF) is in danger as Moody’s Investors Service, a credit rating agency recently downgraded Ghana’s economy deeper into junk status.
“This is an economic signal to the private creditors about the likelihood of them incurring steep losses during the government’s planned debt restructuring.
“If care is not taken Ghana would not get the IMF bailout, as the downgrade of the economy indicates that the nation’s ability to generate revenue to service debt is in doubt,” Dr. Samuel Worlanyo Mensah, an Economist has stated.
The Reverend Dr. Mensah, who is also the Executive Director of the Centre of Greater Impact Africa (CGIA) stated at the 18th edition of the Monthly Stakeholders Engagement and Workers’ appreciation day seminar organized by the Ghana News Agency’s Tema Regional Office.
The monthly engagement aimed at providing a platform for both state and non-state organizations to address national issues to enhance development which was monitored by Myliberty News Network (MNN) in Tema.
The event also served as a motivational mechanism to recognize the editorial contribution of reporters toward national development in general, growth, and promotion of the Tema GNA as the industrial news hub.
Other speakers included Dr. Prince Kofi Kludjeson, former President of the Association of Ghana Industries.
Rev. Dr. Mensah explained that every rating serves as a signal to the investment community, therefore, a downgrade is to inform them that it is not safe to invest in Ghana.
The Economist further said, the downgrade was also a message to investors already operating in Ghana to relook at their investment in the country, stressing “the message to them is your investment is no longer safe, consider relocating to other places”.
Rev. Dr. Mensah again said this may force many expatriates to repatriate their monies to their home countries, explaining that because they need to change the monies from cedi to dollars before repartition, it would lead to high inflation.
“As most of the foreign industries and companies are folding up and repatriating their monies if we don’t empower the local companies when they leave, Ghana’s economy will collapse,” he said.
Assessing the implications of the downgrade by the rating of Moody which has downgraded Ghana’s long-term issuer ratings to CA from CAA2 or further junk status and changed the outlook to stable, Rev. Dr. Mensah described it as an economic coup d’etat.
He said it meant to further worsen the county’s woes, which he stressed might affect the success of getting a bailout from the IMF.
This, he said would lead to a decline in Foreign Direct Investment (FDI) which would have a negative effect on the economy as Ghana has not built the capacity of local producers to fill that gap.
Mr. Francis Ameyibor, Tema Regional Manager of the Ghana News Agency, called on media practitioners to focus reportage on development and how best to help the economy survive instead of stirring up hopelessness among the people.
