Mahamudu Bawumia
Dr. Mahamudu Bawumia

The running mate to the flagbearer of the New Patriotic Party (NPP), Dr Mahamudu Bawumia wants Ghanaians to believe that the Mills-led National Democratic Congress (NDC) government which professes transparency in its administration of the country is not indeed being truly accountable to electrates.

Delivering a lecture on the “real state of our economy” at the sixth edition of the annual Ferdinand Ayim Lectures, Dr Bawumia claimed the Ghanaian economy is not as buoyant as the government will have the people trust.
He among a demonstration of a litany of ‘inconsistencies’ in the economy, cast doubts on the monthly figures released by the statistical service which showed the sustenance of single digit inflation over the past one and a half years.
He said these unreliable figures inform the economic policies adopted by the Bank of Ghana and government which in this case he can link to the rapid depreciation of the Ghana cedi.
The situation with the cedi depreciation cannot be blamed on speculative behaviour but bad policies adopted by the government in the management of the economy, he said. This has caused the cedi to become the weakest performing currency in Africa.
“The current rapid depreciation of the cedi is a sign that the fiscal and monetary policies are not appropriate. Monetary policy decisions over the last year, for example, have been based on the assumption that we have single digit inflation,” he said.
Adding, if that statistical figure is not right “then it means that monetary policies would have been based on wrong information which resulted in the premature easing or reduction in interest rates. This will make cedi denominated assets less attractive and allow people to prefer to move into dollars,” resulting in a fall of the local currency.
In other to curb further fall of the national currency the central bank has announced a number of measures which it said will boost confidence in the cedi and mob up the excesses in the system.
But Dr Mahamudu Bawumia insists these measures will treat “symptoms” and not tackle the causes of the depreciation.
“Unfortunately, rather than tackling the fundamental causes of exchange rate depreciation there is an attempt to blame speculators,” he noted. “…a wrong diagnosis of the underlining reason for an exchange rate depreciation would result in policy errors and would actually worsen the exchange rate depreciation.”
“The type of free fall that we are seeing with the cedi exchange rate is a vote of no confidence by market players, in the management of the economy.”
Though official figures show a dollar going for just below a cedi and eighty pesewas, traders and some service providers are already pricing goods and services at the equivalent of two cedis for a dollar, in anticipation of further fall.
Dr Mahamudu Bawumia thought it was bizarre that at a time that the country was into oil production and there has been massive increases in cocoa prices – and that of other exports – Ghana’s gross international reserve is less than three months in imports and rather experiencing a 168 per cent increase in total public dept.
Outside Oil, Economy Is Not Booming
With reference to the concerns expressed by Kofi Asamoah, the Secretary General of the Trades Union Congress on the discord between the current national macro-economic growth and job creation, Dr Bawumia said the figures have only been “beautified” by income for the oil sector.
Outside of the oil, the economy in not booming, he stated. What is clear from the performance of the real sector, since 2008 is that the growth rate in agriculture, where most people depend on for their livelihood and industry, have declined.
“How are we going to create jobs when the critical sectors of the economy like agriculture are not growing? The jobless growth we are seeing in Ghana under this government is therefore not a mystery. You cannot create jobs when the critical sectors have significantly declined.”
Arch O.Ansah


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