A financial analyst has indicated the recent positive outlook tag on Ghana could boost investor confidence in the country’s economy. Patrick Abankwa Baah noted this likely to help attract more foreign direct investment.
His Assessment comes on the back of New York City based ratings agency, Moody’s, shifting Ghana’s outlook to positive from stable.
The rating agency emphasised that the positive outlook reflects the potential for liquidity risk to ease,” supported by ongoing fiscal reforms under the International Monetary Fund’s (IMF) 3-billion-dollar Extended Credit Facility (ECF) programme.
This development follows the recent agreement reached between the IMF staff and Ghana during the third review of the ECF programme.
Moody’s attributed the shift to positive outlook to strong economic growth, improved fiscal management, strengthened financial sector and positive policy environment.
A financial analyst, Patrick Abankwa Baah has noted the positive outlook driven by the ongoing IMF supported fiscal reforms highlight the country’s progress in addressing its economic challenges and improving its financial stability.
‘‘I think that the implication of this positive outlook is far reaching. It is going to increase investor confidence. If the investor confidence is improved, then with time, the fact that Ghana is now in the positive outlook means that, it will now have borrower cost going down because government will now have avenue to raise funds from other sources than the local Treasury Bill Market. It will also lead to improved credit rating for the country’’, Patrick Abankwa Baah said.
Meanwhile, the financial analyst has cautioned government to stay committed to the IMF bailout programme as the country is not out of the woods yet.
He observed while, the positive outlook is encouraging, it is important for government to note that there are still some challenges and Ghana must continue to implement the reforms diligently to sustain the progress that the country is witnessing. Abankwa Baah noted factors such as global economic conditions, commodity price fluctuations and political instability are things that can still hamper the economic growth the is being seen.
‘‘Moody’s decision to shift Ghana’s outlook to positive is a testament of the country putting in place efforts to address its economic challenges. I think the continuous implementation of sound policies and ability to still maintain fiscal discipline should help Ghana to move up the ladder eventually in terms of ratings’’, Abankwa Baah noted.
That was financial analyst, Patrick Abankwa Baah on Moody’s upgrading Ghana’s Outlook to Positive, boosting investor confidence and urging government to stay focused on the IMF programme.
By Eben Agyekum-Boateng, 3Business
