Economist Professor Peter Quartey is asking government to quickly take drastic measures that would restore confidence in the economy to avoid any downgrade by FITCH.
The rating agency last week indicated that it is likely to downgrade Ghana's credit ratings in the near future because of the current state of the economy. But Professor Quartey tells JOYBUSINESS, this can be avoided, if government is seen to be acting rather than just talking in terms of stabilizing the economy.
“We have said we are going to reduce it but it’s still high. Even the government’s target of 9 per cent has not been met. The evidence is there that you say, you going to do it but you haven’t done it.
So how convincing can you be? I think we should see more action on the part of government in this respect. Perhaps it’s an issue of incompetence in some of these institutions. If it’s so then we need to strengthen them.
If the Ministry of Finance needs to be strengthened with key personnel, be it an economist, or people with the right skills to help the country, we need to do that to help the country move forward” he said.
Any downgrade of Ghana's credit ratings by FITCH in the future could see the country pay very high interest on loans borrowed.
This is because the agency is warning investors and banks that the country is likely to default on future loans because of the current state of its finances.
Government is currently expected to pay about 5 billion cedis this year as interest payments on loans.
In a statement before Parliament Tuesday, Finance Minister Seth Terkper said "our debt management measures are on course."
He said the measures "aim to manage the debt within debt sustainability limits; adopt recovery schemes such as escrows and onlending of loans under commercially viable projects, financing of the capital budget from specific long-term domestic and foreign loands and bonds and not relying on short-term instruments."