Former President John Mahama lacks understanding of the Ghanaian economy, Vice President Mahamudu Bawumia has hit back.
Mahama days ago posted a short clip of Bawumia giving a lecture on the economy when he was the then opposition New Patriotic Party vice presidential candidate.
In the video, Bawumia is heard saying ‘when the fundamentals of the economy is weak, the cedi will expose you.” He was analysing the economy under John Mahama.
Mahama had published the video in response to the recent depreciation of the cedi which has got exporters and importers of commodities alarmed.
Reacting to the former President, the vice president posited he understands Mr Mahama’s difficulty in appreciating the currency depreciation debate.
He added an infograph that showed the rate of the cedi depreciation under former presidents John Kufour, Mills/Mahama and the current administration to back his arguement.
The inforgraphic shows under the 8-year rule of Mr Kufuor, the cedi depreciated by 72 percent and under the 8-year rule of the late Professor John Evans Atta Mills and John Mahama, it depreciated by 247 percent.
And under the 18 months rule of the Akufo-Addo administration, the cedi has depreciated by seven percent, saying it’s a sign of strong economic fundamentals.
Read in full Bawumia’s statement.
It has been brought to my attention that former President Mahama has recently been talking about exchange rate depreciation.
The former President’s comments once again, sadly demonstrate his lack of understanding on key aspects of our economy.
I understand the difficulty of the former President in appreciating the currency depreciation debate. I would try to simplify the explanation for him.
The data on the performance of the Cedi over the years shows that the Cedi is recording one of its best performances in the Fourth Republic under President Nana Addo Dankwa Akufo-Addo.
The depreciation of the Cedi against the US dollar is one of the lowest in the first year of any government since 1992. The data is clear on this indisputable fact.
An equally instructive fact to note is that the NPP has demonstrated to be by far better managers of the Cedi than the NDC.
In the entire 8 years of President Kufuor’s (NPP) rule from 2001 to 2008, the price of the Cedi relative to the dollar moved from GHc0.7 to GHc1.2, representing a depreciation of 72%.
However, in the 8 years rule of both Presidents Mills and Mahama (NDC) from 2009 to 2016 the Cedi depreciated by 247%, moving from GHc1.2 to GHc4.2.
Such higher rate of depreciation in less than a decade is simply unacceptable and signifies high levels of incompetence.
Although it is early days, there is much optimism for a more stronger currency under the leadership of Nana Addo Dankwa Akufo-Addo. Converse to the first 18 months of many governments in which the Cedi depreciated by more than 10%, the first 18 months of this government has recorded a marginal depreciation of 7%.
The reason for our relatively strong exchange rate performance is that our economic fundamentals (which Mr. Mahama sought to question) under Nana Akufo-Addo are strong. Much stronger than the mess he left us.
The deficit is lower, inflation is single digit, the debt to GDP ratio is declining, interest rates are declining, our foreign exchange reserves are healthy, business confidence is rising and economic growth is increasing.
The graphics above tell the story. I hope the former President takes his time to read the facts.
Credit: Pulse Ghana