President Nana Addo Dankwa Akufo-Addo has chastised rating agencies for contributing to Ghana’s current economic difficulties with their “reckless downgrades”.
He said it is preposterous for the rating agencies to take African countries through such difficult situations.
The President, who said this at the opening of the 30th anniversary celebration of the African Export-Import Bank (Afrieximbank) in Accra on Monday, June 19, 2023, noted that such ratings tend to put undue pressures on African economies.
“Ghana recently had to deal with one of the most difficult periods in his post-independent history, difficulties that were exacerbated by the reckless behaviour of rating agencies that engaged in pro-cyclical downgrades that shut Ghana out of the capital market and turned a liquidity crisis into a solvency crisis,” President Akufo-Addo, who is the AU Champion for African Financial Institutions stated in his opening address at the event.
President Akufo-Addo pointed out the risks and costs associated with African nations relying on foreign capital markets. Against the backdrop, he stressed the need for Africans to build their own indigenous financial institutions .
That, he explained, would enable the countries to achieve economic growth through domestic resource mobilization and private sector development.
President Akufo-Addo proposed some interventions that African leaders could rely on to overcome the current economic challenges.
He mentioned the need for capitalization and effective coordination with the African Union. “Unless we have strong financial institutions, we are not going to develop. We have learnt over the decades that relying on foreign capital is both risky and costly. “It has resulted in huge financial leakages to a high cost of default-driven borrowing rates and interest payments and undermines the growth of our financial institution’s domestic resource mobilization and private sector development,” he stated.