A Senior Finance Lecturer at the University of Cape Coast, Seyram Kawor, has said that the further downgrade of the country’s credit rating by rating agency, S&P, was expected.

According to him, the country’s debt distress situation had precipitated downgrades by the rating agencies.

S&P yesterday December 21, 2022, lowered Ghana’s sovereign rating to ‘selective default’, the second time within two weeks that it has downgraded the country.

Speaking to Joy Business, Mr. Kawor said government must demonstrate commitment to improving the fiscal situation of the country.

“We were expecting these downgrades to come. It is just a confirmation of what the downgrades they have done over the past months and years that we have seen that yes we are now a ‘selective default’ country". 

“And so, what we need to do is go and have a thorough discussion with the creditors, the external debt holders, the various categories - the multinational, the bilateral countries that we are indebted to”.

He explained that the country must approach the negotiations with the creditors tactfully in order to ensure they buy into the idea.

“There is something that is very difficult for these people to accept. You are asking us to suspend the debt servicing, you are asking us to exchange your debt but the size of your government is still very high”.

“When the size of your government is still very high and you are still incurring some kind of expenditures, which you can suspend like the expenditure on the national cathedral and all those things. It becomes very difficult for these people [creditors] to accept the proposal you are bringing to them”.