Lecturer at the University of Ghana Business School, Professor Lord Mensah

An economist at the University of Ghana Business School (UGBS) has said that the government has been adopting the lazy man’s approach to managing the country’s economy.

His assertion is in connection with the revision of Ghana’s rating from B-/B to CCC+/C, by Standards & Poors (S&P) Global Ratings, putting the country’s creditworthiness into “junk status.”

According to Professor Lord Mensah, government’s ability to pay its debt “going forward will be difficult and so the downgrade.”

S&P also reviewed the country’s economic outlook to negative, reflecting “Ghana’s limited commercial financing options, and constrained external and fiscal buffers.”

In its latest report, S&P highlighted Ghana’s limited commercial financing options, and constrained external and fiscal buffers, attributing it to the Covid-19 pandemic and the Russian invasion of Ukraine.

Government is however hoping to revive the economy with an IMF programme.

But Prof Mensah says “going to the Eurobond market to borrow has come to replace our export-oriented policies.”

According to him, the current downgrade should be a wake up call for government to “do our assignment well or the next time we will go to CCC-.”

Professor Lord Mensah proposed that the government takes aggressive economic measures in order to save the country.

“For now there have to be aggressive measures which I know for political reasons government know Ghanaians will not be happy, but we have no choice,” he said.

He also called on the government to relook at expenditures that are discretionary and make at least a 50% cut.

In a related development, a Economist and Political Risk Analyst, Dr. Theo Acheampong has described the revision of Ghana’s credit rating to CCC+/C by S&P Global Rating as putting the country’s financial landscape into a more precarious situation.

According to him, the government must quickly fast-track the negotiation with the International Monetary Fund to secure an economic programme urgently, in order to bring credibility to the country’s ability to borrow from the international capital markets.

Speaking on the Super Morning Show Monday August 8th, 2022, Dr. Acheampong said S&P’s rating indicates that Ghana is one step away from defaulting in repaying of its loans.

“What this really has done is that it has made the financing landscape of the country even more challenging because the country’s debt has been pretty much put into a speculative trajectory. And we are only one step below being classified as being in default in that regard”.

“So the financing landscape has become extremely challenging or limiting for the government; the deficit and the debt is rising amidst all the follow-on-effect of the pandemic and the war in Ukraine, it does mean that things are going to be challenging”, he stressed.

Meanwhile, President Akufo-Addo is confident that the Ghanaian economy will bounce back strongly from the ravages of the COVID-19 pandemic, which has been exacerbated by the effects of the Russian invasion of Ukraine.

Speaking on the recent economic challenges that are confronting the nation in an interview on North Star Radio, on Monday, 8th August 2022, President Akufo-Addo indicated that when he took office in January 2017, he inherited an economy that was under an IMF Programme.

According to the President, his government was able to exit successfully, in 2019, the IMF programme started by the erstwhile Mahama government, implemented flagship programmes like the Free SHS policy and 1-District-1-Factory initiatives, and grew the economy at an annual average growth rate of 7% from 2017 to 2020.

“Just as we were able to go through this COVID-situation, I am confident (that we will go through these current difficulties). Let me repeat it, that this government, based on the policies that we have implemented, will find a way to bring our economy back to a better place,” he assured.