Dr. Bawumia exposes NDC’s cedi propaganda

Economic and financial expert, Dr. Mahamudu Bawumia, has said the ruling National Democratic Congress (NDC) is ‘playing’ propaganda with the cedi and warned that such an attitude could be costly to the country.

“Rather than facing up to and dealing with this collapsed currency, the NDC propaganda in the villages is that Ghanaians should be happy because they are getting more cedis for the dollars and the pounds sterling their relatives send them from abroad,” the New Patriotic Party (NPP) vice presidential candidate for the 2016 election said in London at the weekend.

Addressing the Young Executive Forum-UK – a group associated with the NPP – on the state of Ghana’s economy, the former Deputy Governor of the Bank of Ghana said, “For the NDC, the management of the economy boils down to propaganda.” 

Mismanagement

“The government’s mismanagement of the economy has definitely been monumentally exposed by the cedi exchange rate. It is the one variable that cannot be manipulated in the long run,” he observed.

He analyzed, “Imagine that a worker earned GH¢1,000.00 at the beginning of 2009; this was worth some US$840. Today the same GH¢1,000.00 is worth some US$227.”

Cedi Downfall

He said that in 2014, the cedi depreciated by 31% against the US dollar, making it one of the worst performing currencies in Africa; and added that the depreciation of the cedi had continued in 2015, with 27% loss in value between December 2014 and June 2015.

Dr Bawumia posited that the cedi situation was notwithstanding the International Monetary Fund (IMF) bailout adding, “This reflects a lack of policy credibility on the part of the government and a lack of confidence by investors.”

In the last 18 months alone the cedi has depreciated by over 50%. “The periods of NDC economic governance have now become symptomatic with the periods of massive depreciation of the currency,” he noted.

Dr. Bawumia said that the massive depreciation of the exchange rate had been very costly for the economy – for businesses and individuals alike. “For any worker, the depreciation has been devastating for the cost of living as utility, petroleum and other prices of goods and services have shot up.  The cost of doing business has also increased significantly,” he bemoaned.

He reiterated, “As I have said before, if you try to manage the economy with propaganda, the exchange rate will ultimately expose you.”

Policy Credibility

He noted that unfortunately, the government appeared ‘clueless’ as to what to do and added, “This is the price Ghanaians are paying for the government’s lack of policy credibility and weak fundamentals.

“Even the IMF bailout has not been able to restore confidence by convincing the markets that the government is committed to turning things around. The IMF itself has instituted a review of the government performance every four months.

“This is unprecedented for Ghana’s IMF programmes, and demonstrates a lack of confidence by the IMF itself in the government’s commitment to the programme, even though they would not publicly say so.”

Declining Growth

According to Dr Bawumia, economic growth in the country was on a steep decline as records showed that real GDP growth had declined from 15% in 2011 with the onset of oil production, to a projected 3.5% in 2015, including oil; and the decline in economic growth, he maintained, is reflected across all sectors of the economy.

The economic expert said in 2015, interest payments alone on the country’s debt stock would amount to GH¢9.57 billion and that interest payments had increased from GH¢679 million in 2008 to a projected GH¢9.57 billion in 2015 which is an increase of 14-fold.

“Ghana’s total debt in 2008 was GH¢9.5 billion but interest payments in 2015 alone would amount to GH¢9.5 billion. Interest payment as a percentage of GDP has also increased from 2.8% in 2008 to 7.1% in 2015.”

He continued, “In the energy sector for example, government is highly indebted to VRA and ECG. Government owes ECG some GH¢700 million and owes VRA GH¢1.0 billion. This has compromised the balance sheet of VRA and its ability to import crude oil for the generation of power.”

He said the situation had in turn forced VRA to over-use the Akosombo dam by 30% more than recommended since 2012, thereby causing the drop in the level of the dam.

Dr Bawumia stressed, “Ultimately, the dumsor problem is more of a financial problem than a technical one.”

By William Yaw Owusu

ABOUT: Nana Kwesi Coomson

[email protected]

An Entrepreneur, Corporate Social Responsibility, Corporate Communications Executive and Philanthropist. Editor-in-Chief of www.233times.com. A Senior Journalist with Ghanaian Chronicle Newspaper. An alumnus of Adisadel College where he read General Arts. His first degree is in Bachelor of Arts - Political Science (major) and History (minor) from the University of Ghana. He holds MSc in Corporate Social Responsibility (CSR) and Energy with Public Relations (PR) from the Robert Gordon University in the United Kingdom. He is a 2018 Mandela Washington Fellow who studied at Clark Atlanta University in USA on the Business and Entrepreneurship track.

View all posts by: Nana Kwesi Coomson  

Leave a Reply

Your email address will not be published. Required fields are marked *

ABOUT 233TIMES

233times is a Ghanaian media house which serves as a major source of exclusive interviews ,music and video downloads, news and more.

233times reports on major events,news covering entertainment, politics, sports, business, technology, etc from within Ghana, Africa and beyond.

We have a platform for the amateur artistes to portray their staggering talents ...more...

CONTACT US

For further enquiries, please contact us via our contact us page link: CONTACT

WE ON SOCIAL MEDIA. FOLLOW US


To advertise with us or make enquiries, please visit 233times.net/advertise or call Selorm (Selorm) | Selorm (Nana Kwesi)