Gaining creditworthiness good but going back to borrow not the best option – Prof. Quartey

The Director of the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Professor Peter Quartey, has stated that the move by Ghana to become credit-worthy after several downgrades by rating agencies is a good one.

According to him, seeking to become credit-worthy is a good call and can attract investments.

However, he advised that the government treads cautiously in its haste to enter the international capital market to borrow.

“It is good to work back to ensure you are credit-worthy. That feeling that your country is credit-worthy itself is good, and that attracts investments but I will caution that we hasten slowly in going back to the capital market because borrowing at a commercial rate is not the best option.

“It brings huge interest payments which affect our ability at debt sustainability. We should explore first, raising domestic revenue, and expanding the tax net, not to overburden the same people but, to make tax collection more efficient. I believe a lot has been done but we can deepen that and enhance that option for raising more revenue domestically,” he was quoted by 3news.

Prof. Quartey joins the list of analysts who have cautioned the government against its decision to go back to the international capital market.

The Director of Business Operations at Dalex Finance, Joe Jackson, has also expressed dissatisfaction with the president’s statement on returning to the international capital market to borrow.

“I am not clear in my mind whether the president is talking about borrowing in the next year or so, or whether he is referring to borrowing from the international Eurobond or commercial paper market in the next three or four years because we haven’t even finished negotiating with the current creditors. We haven’t dotted the I’s and crossed the T’s. We have a commitment as to the way forward, but the deal hasn’t been finalized yet, so going back to the market baffles me a bit," a citinewsroom report quoted.

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