The Sustainable Public Debt Management programme of the Collaborative Africa Budget Reform Initiative (CABRI) represented by Jim Matsemela was invited to join the technical support mission on international credit ratings (ICRs) in Ghana organised by the African Peer Review Mechanism (APRM) from 11-15 March 2024.
The sovereign credit ratings usually form part of investor relations of any public debt management programme or it’s a dedicated function within every Debt Management Office or Chief Economist Office depending (as the case may be) on the institutional set-up in African Ministries of Finance(s) & Economic Planning and/or Development.
Meetings in which CABRI took part, were held with the following key stakeholders in Ghana: (i) Ghana National Chamber of Commerce & Industries (GNCCI); (Central) Bank of Ghana (BOG); Securities & Exchange Commission (SEC); Ghana Union of Traders Association (GUTA); Ministry of Finance & Economic Planning (MOFEP) and the National Pensions Regulatory Authority (NPRA).
Some of the interesting themes and points of improvements discussed in the consultations with various stakeholder briefly include the following:
- Capacity in engaging (including communicating) and managing sovereign credit ratings
- Coordination and representation during the rating visits
- How government policy actions such as imposing of levies, impact the small and medium sized business and what might the impact of payment arrears (cash and debt management problem) on their operations.
The discussions also touched upon the Institutional framework – to set up a country ICRA liaison team to facilitate engagements between government and the ICRAs. The objective in setting up the country ICRA liaison team is to ensure that the country speaks with one voice on key discussion themes raised by ICRAs.
CABRI is pleased to have been asked to make key recommendations on a list of findings (currently confidential) regarding the operations of the institutional set-up and this briefly includes having a Standing Committee on Sovereign Credit Ratings and if there is a standing committee already set up, say on Banking and Financial Markets, the sovereign ratings can become a sub-committee of the standing committee.
CABRI wishes to thank Dr McBride Mkhalamba (Director, APRM); Dr Misheck Mutize (Lead Researcher, APRM); Dr Mohammed Ibrahim (Deputy Minister, Ministry of Economy & Finances in Egypt); Ms Sonia Essobmadje (Chief, Innovative Finance & Capital Market Section, UNECA); Ejigayhu Tefera (Senior Economic Researcher, APRM) for leading the support mission and allowing CABRI to share insights towards improving sovereign rating management processes in Ghana.