Government is not rushing to re-enter external markets despite a credit rating upgrade, because its priority is stabilising the local economy, says Dr Sharif Mahmud Khalid, Economic Policy Advisor to the Vice President.
Speaking on Joy News’ PM Express, Dr Khalid defended the administration’s fiscal discipline following Fitch’s decision to upgrade Ghana’s Long-Term Foreign-Currency Issuer Default Rating from ‘Restricted Default’ to ‘B-’ with a Stable Outlook.
“This rating is not just for us to celebrate and go back to borrowing,” he said. “We are not getting bullish. We are focused. We want to stabilise the domestic market first.”
He argued that while credit ratings like Fitch’s are primarily geared toward external markets, Ghana is not ready to return to those platforms yet.
“This is for the external market, which we are not ready as of yet to even start pushing through,” he insisted. “We believe in stabilising the domestic market, which is why we have internal controls.”
According to Dr Khalid, the improved rating is not a fluke but the result of deliberate choices and policy moves taken since the current administration assumed office.
“If you look at these ratings when we took office, remember that we started to make some gains thanks to the domestic debt exchange programme,” he noted.
“That programme gave us some breathing space, and obviously that would impact any external ratings.”
He also pointed to what he called structural reforms and cost containment as part of the government’s commitment.
“As far as spending or what you call overspending, we’ve been tightening controls. We’ve reduced appointments, and that in itself is a signal,” he said.
Dr Khalid dismissed the idea that the government had already overspent, arguing that in fiscal management, the market reacts to the budget the moment it is read, not when the money is actually spent.
“Once the budget is read, the market responds whether you spend a penny or not. Because the market knows what you’re going to spend. You’ve done the allocations and appropriations.”
The Economic Advisor also referenced efforts to rebuild credibility with both local and international partners.
“We reactivated the sinking fund. That’s an insurance measure for servicing debt,” he explained.
“If you commit to both external and domestic debt programs, you naturally improve. And that’s what Fitch is recognising.”
In Dr Khalid’s view, the B- rating means something very clear: “It means you’ve improved in terms of your risk of defaulting on a debt payment.”
He credited not just the Fitch rating but the broader macroeconomic trajectory, arguing that there’s now evidence of an economy on the mend.
“You were talking earlier about the economy looking better. The downgrading is now being reversed. Indicators are being upgraded.”
Despite the positive tone, Dr Khalid stressed that there would be no complacency.
“We’re not here celebrating. We are building. And we’ll continue to keep our eyes on stabilising the Ghanaian economy.”
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