Nat’l Tymes News Desk
MINISTER for Finance and Economic Planning, Dr. Cassiel Ato Forson, has blamed the previous New Patriotic Party (NPP) administration for what he described as the collapse of Ghana’s economy.
Presenting a statement on the floor of Parliament on Thursday, Dr. Ato Forson said the Akufo-Addo/Bawumia government mismanaged the economy and plunged the country into one of the worst economic crises in Ghana’s history.
According to him, the situation became so severe that Ghana was forced to seek support from the International Monetary Fund (IMF) on July 1, 2022.
The Finance Minister said the country faced major fiscal challenges, rising debt default risks, high inflation, rapid depreciation of the cedi, and declining investor confidence due to what he called the “abrupt mishandling” of the economy by the previous administration.
“To appreciate the magnitude of this moment, we must briefly review the gravity of the crisis that developed in the country,” Dr. Ato Forson told Parliament.
He explained that the worsening economic conditions caused Ghana to lose access to the international capital market, while the country’s external reserves also came under serious pressure.
Dr. Ato Forson further noted that major international credit rating agencies repeatedly downgraded Ghana’s sovereign credit ratings between 2022 and 2023.
He cited Moody’s downgrade of Ghana to CAA1 from B3 in February 2023, S&P’s downgrade to CCC+ in August 2022, and Fitch’s downgrade to CCC in September 2022 as clear signs of the deteriorating state of the economy.
According to the Minister, the downgrades pushed Ghana’s risk premium to an all-time high of about 3,400 basis points, worsening the country’s financial difficulties.
Dr. Ato Forson also revealed that the crisis badly affected key state institutions, including the Ghana Cocoa Board (COCOBOD), which reportedly failed to secure its syndicated loan facility for the first time in more than 30 years.
He added that some domestic commercial banks also struggled to secure international financial support because foreign banks refused to confirm their financial instruments.
The Finance Minister recalled that on December 5, 2022, the previous (NPP) administration introduced the Domestic Debt Exchange Programme (DDEP) after announcing that Ghana could no longer meet its domestic debt obligations.
He explained that the programme imposed heavy financial losses on bondholders, including commercial banks, pension funds, insurance companies, individual investors, and pensioners.
Source: Nationaltymes.com
