The Moody’s Investors Service (‘Moody’s’) report recently changed Ghana’s rating from stable to positive but its objectivity has been called into question.
Speaking to JoyNews’ PM Express programme on Wednesday, the Dean of School of Business at University of Cape Coast, Prof. John Gatsi stated that the report could either be paid for by the government or carried out on Moody’s own volition.
If it was paid for by the government, then the objectivity of the report coming in an election year is doubtful, the lecturer said.
Reacting these remarks on the same show, senior lecturer at the University of Ghana Business School (UGBS), Dr. Lord Mensah corroborated Prof. Gatsi’s assertions that the report may have been paid for by the government.
“There is no single ratings that has gone on in Africa that is not solicited (paid for),” Dr. Mensah said, adding the rating help the African countries to attract investment from abroad.
However, he disagreed that Moody’s could compromise its integrity for Ghana. He said agency had carved a niche for itself and would not risk it for a small country like Ghana and would, therefore, present an objective report.
The decision to assign a positive outlook reflects Moody’s rising confidence that the country’s institutions and policy settings will foster improved macroeconomic and fiscal stability over the medium term, in part as a consequence of the reforms implemented under the recent IMF reform program.
Those reforms are beginning to bear fruit, as seen for example in the return to primary fiscal surpluses, measures to smooth the debt maturity profile and increasingly sustainable growth prospects.
Pressures and risks remain, as evidenced by persistent revenue challenges, a potential repeat of pre-election fiscal cycles, and the emergence of significant arrears and further contingent liabilities in the energy sector, all contributing to rising public debt.
The positive outlook reflects increasing confidence that the government will manage those pressures in such a way as to sustain and enhance external and fiscal stability.