Vice President Dr. Mahamudu Bawumia has urged the opposition National Democratic Party (NDC) not to jump into conclusions that the free fall of the Ghana Cedi is as a result of weak fundamentals under the Akufo-Addo government.
He insisted that the NDC’s best performance under the John Mahama administration is the New Patriotic Party (NPP) government’s worst performance ever. The Head of Government’s Economic Team made these comments at the Town Hall Meeting in Accra Wednesday, April 4, 2019.
. According to Dr. Bawumia, faulting weak fundamentals for the cedi’s fall “defies logic” as there could be other external factors causing the exchange rate depreciation. “For example, if your leg is broken you’re going to be unable to walk, then I’m somewhere and somebody comes to me and say ‘this person is unable to walk’ can I just conclude that the legs must be broken?
There can be some other reasons why you’re unable to walk. But the NDC logic will insist in the face of contrary evidence that if you cannot walk then your leg must be broken,” he teases. Taking Ghanaians back the memory lane, the Vice President indicated that in “2014 the exchange rate depreciated by 31.3 per cent. The fiscal deficit was 10.1 per cent of GDP. The public debt rose to 70.2 per cent of GDP. Inflation rose to 17 per cent and GDP growth had declined from 7.3 per cent to 4 per cent.
The economic fundamentals had weakened significantly and, therefore, the depreciation was easily explained. It was not caused by dwarfs or high rise buildings as we were told.”
Comparing the fundamentals under the erstwhile NDC government, particularly in 2014 and 2015 and the current regime with graphical illustrations, Dr. Bawumia insists the economy was in a weaker position compared to what was experienced in 2018.
On the cedis’ performance, the economist intimated that the cedi performed well for the first time in since 2011 immediately his government took over power in 2017. “At the end of December 2017, the cedi had cumulatively depreciated by 4.9 per cent compared to 9.6 per cent in 2016 and this was the cedi’s best performance since 2011. The cedi, however, depreciated by 8.4 per cent in 2018,” he stated.
Dr. Bawumia blamed the cedi’s poor performance on emerging market pressures and new exchange interest rate increases. “The data on the annual rate of the depreciation of the cedi in recent years show that the worst performance so far under the NPP government, the 8.4 per cent depreciation that we saw in 2018, that worst performance is better than the best performance under the previous government between 2012 and 2016. So our worst is better than your best and then you say boot-for-boot. This one is more like boot for charlie wote,” Dr. Bawumia said amidst laughter and applause from the audience.
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