APA – Accra (Ghana)
The report that the international ratings agency, Fitch Ratings, has downgraded Ghana’s creditworthiness to further junk status and the report that some Oil Marketing Companies have started reducing prices of petroleum products at the pumps from yesterday are some of the leading stories in the Ghanaian press on Friday.
The Ghanaian Times reports that the international ratings agency, Fitch Ratings, has downgraded Ghana’s creditworthiness to further junk status.
In its latest report on Ghana, it said “Fitch Ratings downgraded Ghana’s Long-Term Local Currency (LC) Issuer Default Rating (IDR) to Restricted Default (RD) from ‘C’.”
It attributed the downgrade to the decision by the government to embark on the debt exchange programme and the recent default on local bonds that matured on February 6, 2023 and another one due for payment this week.
“The downgrade of Ghana’s local currency denominated debt follows the completion of a domestic debt exchange offer by the Republic of Ghana. This transaction is an element of the recovery programme for which the government is seeking the support of the International Monetary Fund for a 3-year Extended Credit Facility (ECF) of about $3 billion”.
Fitch also affirmed Ghana’s Long-Term Foreign Currency (FC) IDR at ‘C’, saying, “Fitch typically does not assign Rating Outlooks to sovereigns with a rating of ‘CCC+’ or below”.
Fitch downgraded the Long-Term Foreign Currency Issuer Default Ratings (IDR) to ‘C’ from ‘CC’ on December 21, 2022 following the government’s announcement of a suspension of payments on selected external debt.
Ghana subsequently asked official creditors for a restructuring of its external debt under the G20 Common Framework.
A Eurobond coupon payment, due on January 18, 2023, has not been honoured.
The newspaper says that some Oil Marketing Companies (OMC) have started reducing prices of petroleum products at the pumps from yesterday.
This is the second time fuel prices have been reduced this year.
GOIL has reduced its prices as a litre of petrol is now going for GH¢14.50.
This represents almost 5 per cent reduction from the previous price.
Diesel, on the other hand is going for GH¢14.90, showing a price reduction by almost 3 per cent per litre.
The reduction is in line with the two-week review in prices which has been influenced by a fairly stable cedi and prices of Petroleum Products on the International Market.
Earlier, the Institute for Energy Security (IES) predicted that prices of petrol and diesel were expected to drop significantly between 7.1 per cent and 10.8 per cent at the pumps, from Thursday February 16, 2022.
According to the IES, petrol was expected to sell at about GH¢14.40 per litre, and diesel go-ing for about GH¢13.90 per litre.
But the IES said a price of a kilogramme of LPG may hinged up to sell at GH¢14.70 before the close of second pricing window for February 2023.
The fall in prices of petrol and diesel are due to a marginal appreciation of the cedi to the dollar and drop in the prices of petrol and diesel globally.
The Graphic reports that President Nana Addo Dankwa Akufo-Addo has explained that he maintains calm composure and stability during crisis as President.
That is to motivate the citizenry not to wobble but be assured that whatever the situation, it is surmountable.
“I am compelled by where I am to be stable and composed and make sure that I reflect that for the people of Ghana to understand that the problems the country is going through are surmountable and not one in which we have to hang our heads and be defeated,” he assured.
President Akufo-Addo stated this when he addressed students of the Wesley Girls High School of Cape Coast who were at the Jubilee House in Accra on an educational tour last Wednesday.
This was an answer to a question posed by one of the students about how the President is able to maintain his composure in the midst of challenges and crisis.
The students from senior high school year two and three (SHS2 and SHS3) asked questions ranging from how government operates, foreign aid and its influence on the economy, President’s composure during crisis and how resources are shared for schools to benefit.
In what could pass as one of the longest open interactions the President has had with any group that visited the Jubilee House, especially students, President Akufo-Addo took the students, numbering over 150, through the principles of separation of powers, checks and balances and how those democratic building blocks have operated in Ghana since independence.
Answering questions, President Akufo-Addo noted that if there were challenges and crisis and he, the President of the country, was seen by Ghanaians as wobbly, it meant that the country was also trembling and that would not bode well for the citizenry.
“It is important in leadership that you show that composure so that when events occur they can be surmounted and controlled for the people to know that it was not an issue we have to hang our heads and be defeated,” the President added.
“It is important that in leadership you do show that composure so that events when they occur are events that can be surmounted and controlled,” he added.
The newspaper says that the Minister of Finance, Ken Ofori-Atta, has calmed the nerves of pensioner bondholders, insisting that the government will not shortchange their legitimate right but will honour their coupon payments and maturing principals, like all government bondholders.
He told Parliament yesterday that the government remained committed to the well-being and dignity of the senior citizens and pensioners.
But the convener of the Pensioner Bondholders, Dr Adu Anane Antwi, in an interview with the Daily Graphic, prayed the government to walk the talk by honouring the various maturing dates of each of the bondholders, looking at the precarious financial condition of the country.
To him, the surest way for the government to remain afloat and honour its pledge was to cut down on the size of government to rake in more cash.
The Finance Minister was in Parliament to brief the House on the Domestic Debt Exchange Programme (DDEP) for the first time following the recent picketing at the ministry by protestors who want issuer exemption and not self-exemption.
The pensioners were also in the Public Gallery of Parliament in their numbers but many of them said they were not satisfied with the clarity on the policy.
Some of them said the minister’s address appeared more of the presentation of the annual budget and government’s fiscal policy.
Appearing in his signature all-white apparel with extensive quotes from the Holy Bible, the Finance Minister said: “Indeed, it has personally caused me great distress as a number of them have picketed the premises of the Ministry of Finance since Monday, 6th February, 2023.”
Mr Ofori-Atta said the DDEP would also build momentum for the external restructuring programme, which had also commenced.
“As part of this process, Ghana has officially asked its bilateral creditors for a Debt Treatment initiative under the G-20 Common framework.
“Consequently, Ghana co-hosted a meeting with the Paris Club, including both Paris Club and Non-Paris Club creditors on January 10, 2023. We reiterated the request for expedited treatment under the Common Framework and presented our economic and fiscal outlook as well as the steps undertaken so far with the DDEP,” the Finance Minister said.
Breaking down the terms and the categories of the DDEP, the minister said it was well crafted to address the specific concerns of the different categories of holders under three groups.
Category ‘A’ is made up of Collective Investment Schemes and Natural Persons below the age of 59; Category ‘B’ – Natural persons 59 years old or older; and ‘C’ made up of General Category Holders, representing all other holders except those exempted.
GIK/APA