Alex Mould, a former Chief Executive Officer of the Ghana National Petroleum Commission (GNPC), is urging the government to lower public expenditure as part of its austerity measures in the face of the country’s economic challenges.
Furthermore, he claims that demands for the government to return to the International Monetary Fund (IMF) must be addressed immediately in order to save the economy.
Alex Mould’s advice comes as international credit rating agencies have cut Ghana’s credit rating.
“First is the management of the expenditure because that is what is within our direct control. The most important thing is that we need a credit line because our credibility is very low. The only way we can bring the credibility up is to go to a very creditworthy institution to hold our hands to our various creditors and ask them for the extended reduced interest rate to minimize debt rate so we can have room to operate”, he told Bernard Avle on the Point of View on Citi TV.
Fitch lowered Ghana’s economy from B to B- with a negative outlook in January 2022. Moody’s also reduced Ghana’s economy’s rating from B3 with a negative outlook to Caa1 with a stable outlook.
According to them, the new ratings reflect Ghana’s difficulties in addressing its liquidity and debt issues.
Ghana, for example, is resorting to domestic income mobilization to save the situation due to restricted access to the international financial market.
Some commentators have recommended requesting an IMF bailout as a preferable option in the face of widespread popular opposition to the E-levy, but the administration has said on many platforms that it does not intend to seek IMF help.
In response to new demands for Ghana to seek IMF aid, Mr Mould stated that the time would only be opportune if the government expedites the process of seeking such assistance to stabilize the economy.
“Obviously, we need new money and right now, without that credibility, no one is going to listen to us. So it is not that someone wants us to go to the IMF because that is the institution that gives us the credit derivative, but rather when we will go to them, and the earlier the better we recover over time. So we need to cut down on our expenditure and get our credit lines open and manage our local interest rate”.
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SOURCE: CITINEWS
