Vice President Dr. Mahamudu Bawumia has contended that the depreciation of the Ghanaian cedi against the US dollar has improved compared to its performance during the previous John Dramani Mahama’s administration.
In an interview with AfricaWatch, Dr. Bawumia emphasizes the relative stability of the cedi against the US dollar during President Akufo-Addo’s tenure.
Despite economic challenges, Dr. Bawumia asserts sustained cedi depreciation has been manageable.
Citing data, Dr. Bawumia compares cedi depreciation between NPP and NDC administrations, noting lower depreciation rates under NPP.
Defending his previous statement on weak NDC fundamentals, Dr. Bawumia links recent economic challenges to global crises and domestic factors.
Ghana faces economic turmoil, defaulting on external debt payments totaling $30 billion in 2022.
With limited access to international capital markets, Ghana resorts to domestic treasury bills for borrowing.
Under the 17th IMF bailout program, Ghana reaches a staff-level agreement for a third installment of $360 million.
“Why not? We use averages to measure progress in statistics and economics all the time. It is a valid comparison of the management of the exchange rate under our government versus under the NDC government. The point is that notwithstanding the major global and domestic challenges we have been through, it is remarkable that whereas the exchange-rate depreciation between 2009-2016 averaged 13.9%, between 2017-2023 it averaged 13.1%. That is a fact,” Dr Bawumia stated.
He continued, “The data shows that from 2009-2016, the cedi depreciated cumulatively by 71.1%, and between 2017 and 2023, the cumulative depreciation was 64.6%. So, whether you look at the average or the cumulative, the depreciation of the cedi has been lower under our government, notwithstanding the severe global shocks we have endured. That is the basic truth.”
“Absolutely! It is still true, and I will continue to stand by that statement. We saw that between 2017 and 2021 when the fundamentals in terms of the fiscal deficit, inflation, GDP growth, external balances, and international reserves were fairly strong, the exchange rate was relatively stable.
“But following the COVID-19 pandemic, the Russia-Ukraine war, the banking-sector crisis, the excess-capacity energy payments, and the lack of access to international capital markets, the fundamentals of the economy were weakened, and the fiscal deficit and debt levels increased,” he explained.