Economic experts are dismissing the recent B3 Stable rating given to Ghana by international rating agency, Moody’s a potentially solicited and may not reflect the true economic picture in Ghana.
“We cannot put our hopes on Moody’s especially when we are not aware of whether this rating is solicited or unsolicited,” warned Prof. John Gatsi, Finance and Economics lecturer at the University of Cape Coast.
According to him, sometimes beneficiary countries or entities to these ratings specifically contract Moody’s and other rating agencies to do a rating that will often project them in good light with the international investment and credit community.
Prof. Gatsi, said a more credible assessment is that which was made recently by the International Monetary Fund (IMF) which declared that Ghana is tottering on the edge of debt unsustainability and that economic growth would actually be lower than projected.
“Moody’s isn’t immune from bias and methodological inconsistency, hence putting a high premium on Moody’s rating might not be helpful. The IMF’s Article IV report (December 2019) is before us must be taken more seriously,” he told Joy News in an interview monitored by Whatsup News.
“Moody’s rating does not resolve the precarious debt burden ratios and different levels of poverty being experienced by Ghanaians – water poverty, energy poverty, healthcare access challenges and unsound jobs against the expectations of effectively integrating SDGs in our budgets implementation,” the economics lecturer warned.
Moody’s earlier this week revised Ghana’s economic outlook ratings from B3 Stable to B3 Positive, meaning investors could have better hope in the economy last year March’s downgrading from B2 to B3.
Moody’s in a statement, however, explained that its decision to assign a positive outlook stems from its rising confidence that the country’s institutions and policy settings will lead to fiscal stability among others as a result of the reforms implemented under the recent IMF reform programme.
In contrast, the opposition National Democratic Congress (NDC) Member of Parliament for Bolgatanga Central, Isaac Adongo, described the Moody’s rating as a choreographed fraud.
On Accra based Metro TV’s “Good Evening Ghana” political talk show, Hon. Adongo revealed how Moody’s ignored a whopping US$4.25billion debt that the Akufo-Addo government had reportedly hidden in plain sight.
According to him, the convenient oversight is due to the fact that the government had paid Moody’s for the rating in a bid to shore up Ghana’s credit worthiness that it wants to use to lure investors into buying a US$3billion Eurobond that it is issuing.
Indeed, according to Adongo, this latest rating that pegs Ghana’s bond rating at B3 with a positive outlook was not done by Moody’s out of its own volition, but under its Investor service which is a paid-for rating.
He points out that for inflating ratings to misguide investors into the 2008 subprime mortgage crisis, Moody’s has been fined US$864million by the US government. It is paying US$460million to the US Justice Department and the other US$404million to 21 States of the US including, Washington.
“As we speak today, Moody’s is one of those institutions sanctioned for inflating ratings of mortgage companies in America that led to the 2008 financial crises – subprime and mortgage crises,” Adongo remembered.