Ghanaian chartered economist has advised African and other emerging countries to develop internal mechanisms that will prevent the negative impact of these credit rating institutions.
The economist said the beneficiaries of these credit ratings are foreign investors from developed countries, and they are the ones who benefit more from the credit ratings.
”Emerging countries and Africa must look at what they could do internally to address the issue of credit ratings, saying, ”who are the beneficiaries of these credit ratings? The foreign investors are not from emerging countries, and they are the ones who would benefit from these ratings”, he told the host of Frontline on Rainbow Radio 87.5Fm, Kwabena Agyapong.
He lamented these ratings make it difficult for developing countries to get the needed financial capacity to develop.
He strongly;y argued that it was time African countries broadly discussed how the international global architecture is planned or developed so, that these ratings don’t create problems for developing countries.
”The credit ratings create a lot of panic in the investment community. It was about time we broadened the discussion on credit rating agencies and the impact their ratings have on the finances of these countries,” he stated.
He reiterated the need for African countries to consider establishing rating agencies.
He added that ”the establishment of a rating agency is one point. The other point is why does Africa contract loans? We contract the loans because we are not raising a lot of revenue. At the same time, we are managing the scarce resources we have”.
Mt. Amoah Darkwah said if we can prevent corruption, mismanagement and procurement breaches, we would not need to go for loans.
”We need to do our homework well so we can rake in a lot of money domestically and stop the over-reliance on the international capital market for loans will stop. In these times, access to the international capital market is going to be very difficult, and even if we get it, the price we are going to pay is going to be very huge.”
I think the broader discussion for Africa is to do our homework well so that the over-reliance on the international capital market and these credit agencies, is reduced. That is what will keep us developed in Africa.”
By: Rashid Obodai Provencal/Rainbowradioonline.com/Ghana