Credit-rating agencies not God; ratings can be faulted – Economist

Pronouncements of credit-rating agencies are not messages from God and can be faulted, a chartered economist has said.

Dr John Gatsi lamented how Ghanaians consider messages from these agencies as indisputable.

“That is very bad in this country,” he said.

“Credit-rating agencies in some countries have been described as political activists.”

Dr Gatsi made these remarks in an interview on TV3 on Monday, March 23.

He was speaking over recent disagreement between government and some credit-rating agencies viz Moody’s Investors Service and Fitch Ratings.

Both agencies cast doubt on Ghana’s economic disposition in their latest releases.

While Moody’s downgraded Ghana’s sovereign rating and put the country on a negative outlook, Fitch keeps Ghana’s rating at ‘B’ but also with a negative outlook, a position disputed by government.

“The key element of what we are doing is to address the revenue shortfalls, ensure the achievement of the objectives of the ongoing fiscal consolidation, and keep borrowing in line with approved levels,” Finance Minister Seth Terkper told Reuters last week.

“We have also cleared most of the arrears and we are removing subsidies.”

But chartered economist Dr Gatsi said some credit-rating agencies can disrupt good measures with their statements just to unsettle governments.

“In some countries they helped to remove some governments in power,” he said. “That’s why the European Union has introduced regulations to regulate the way they do their work.”