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NPP’s governance yields better credit rating than NDC, claims Danquah Institute

The Danquah Institute (DI), a policy think tank, has asserted that the performance of the ruling New Patriotic Party (NPP) in governance consistently leads to a superior credit rating compared to the opposition National Democratic Congress (NDC).

During the inaugural edition of the Institute’s monthly media briefing, held on Tuesday, February 13, 2023, under the theme “Analysis of the Ghanaian Economy,” Dr. Frank Bannor, Head of Research at DI, highlighted significant shifts in Ghana’s credit rating over recent years.

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Dr. Bannor, also a Senior Research and Policy Analyst at CDS, noted that as the NPP exited government in 2008, Standard & Poor’s had rated the Ghanaian economy at B+ with a Stable Outlook. However, under NDC’s stewardship, the credit rating deteriorated to B- with a Negative Outlook by April 2015.

Executive Director of the Danquah Institute, Dr Antoinette Tsiboe-Darko

He highlighted the pivotal moment when Ghana subscribed to the IMF extended credit facility under NDC’s administration, which prevented the country from being excluded from the international bond market.

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The rating saw an improvement in November 2015, climbing back to B- with a Stable Outlook. Dr. Bannor underscored that under NPP’s leadership, the credit rating consistently improved, reaching B with a Stable Outlook by the end of 2019.

However, he lamented a decline in the rating from 2020 onwards, culminating in a CCC+ rating in 2022, rendering it difficult for Ghana to access credit from the international bond market, necessitating another IMF extended credit facility program.

Dr. Bannor illustrated the impact on Ghana’s credit rating, highlighting that during NDC’s tenure from January 2009 to April 2016, the country regressed by 7 steps on the credit rating ladder. He emphasized that while NPP achieved an upgrade in its first term, NDC did not experience any upgrades during its 8-year tenure (2009-2016).

Beyond credit ratings, the Danquah Institute delved into other vital economic indicators such as GDP growth, inflation, exchange rate, debt-to-GDP ratio, fiscal policy, and primary balance. These indicators, the Institute argued, are essential for sustainable development.

Dr. Bannor concluded by expressing the Institute’s commitment to providing detailed research to enrich discussions on economic issues, aiming to empower interested Ghanaians with a deeper understanding of critical economic matters.

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