Akufo-Addo – Reckless behaviour of rating agencies worsened Ghana’s economic woes
President Nana Addo Dankwa Akufo-Addo of Ghana recently expressed his concern over the consistent downgrades of his country’s economy by credit rating agencies, attributing them to Ghana’s current economic challenges.
He criticized these “reckless downgrades” and argued that they are not in the best interests of developing countries like Ghana.
During the 30th-anniversary celebration of the African Export-Import Bank in Accra, President Akufo-Addo highlighted the detrimental effects of these ratings on African economies, stating that they impose undue pressure. He emphasized his role as the AU champion for African financial institutions and the leader of a country that recently faced significant difficulties exacerbated by the rating agencies’ behavior.
President Akufo-Addo mentioned that pro-cyclical downgrades by rating agencies had shut Ghana out of the capital market and turned a liquidity crisis into a solvency crisis. He also underlined the risks and costs associated with African nations relying heavily on foreign capital markets.
The president’s keynote address emphasized the need for Africans to build their own indigenous financial institutions to foster economic growth through domestic resource mobilization and private sector development. He outlined the drawbacks of relying on foreign capital, including financial leakages, high borrowing rates, and interest payments.
According to President Akufo-Addo, this heavy reliance on foreign capital undermines the growth of domestic financial institutions and hampers the overall development of African economies.
In conclusion, President Akufo-Addo proposed several interventions for African leaders to overcome the current economic challenges. He stressed the importance of capitalization and effective coordination with the African Union.
The president warned that without strong financial institutions, development would be hindered. He emphasized the lessons learned over the decades regarding the risks and costs associated with depending on foreign capital, which have led to financial leakages, high borrowing rates, and interest payments. To promote sustainable economic growth, he urged African countries to prioritize domestic resource mobilization and private sector development.
Source – citinewsroom.com
