He said the recent downgrades by rating agencies have literally made the economy useless.
Ghana’s economy is now a junk economy – Fiifi Kwetey
Fiifi Fiavi Kwetey, a former Member of Parliament for Ketu South has bemoaned the current state of the Ghanaian economy.
In an exclusive interview with Samuel Eshun on the Happy Morning Show, Hon. Fiifi Kwetey opined that the country’s economy is constantly being downgraded and for him, that is a red flag sign of a collapsing economy.
“It is a very sad situation that we find ourselves in. I’ll say this is an economy that is really in its knees. Virtually in a weekly basis this is economy is being downgraded and when you reach this stage as far as international investors are concerned; our economy is now what you’d describe as a junk economy.”
“It means nobody and absolutely nobody has confidence in us. That is terrible and very dangerous for people not to have confidence in the country. Come down to the economy itself you can see what is going on.”
“The Cedi has been virtually in a state of collapse, inflation and I don’t know the last time this country had inflation in the levels we are experiencing. Naturally that brings hardships to people. Prices of goods are up in a daily basis, business are effectively on their knees and among other tortures,” he said.
Moody’s recently reduced the country’s long-term issuer and senior unsecured debt ratings to Caa2 from Caa1 and placed the ratings on review for downgrade.
The agency explained that the latest downgrade reflects the recent macroeconomic challenges of Ghana's economy.
It added that the economic woes have caused a deterioration of the government's liquidity, and debt sustainability difficulties, posing an increased risk of debt default.
Moody’s said on its official website on September 30, 2022: "Without external support, the government's policy levers to arrest a worsening macroeconomic backdrop and heavier debt burden are extremely limited; the government's small revenue base, large and increasingly absorbed by interest payments, further intensifies the policy dilemma between competing objectives, including servicing debt while meeting essential social needs.”
It added that the reason for initiation of the review for downgrade is prompted by the ongoing negotiations between Ghana and the International Monetary Fund.
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