A professor with the University of Ghana (UG), Lord Mensah, has rubbished Vice President, Dr. Mahamudu Bawumia’s plan to provide smartphones on a two Ghana Cedis (GHC2.00) monthly payment scheme.
He has called it financially impractical.
In a post on the X platform, Executive Director, Centre for Investment Advisory and Sustainable Finance (CIASF), analyzed the proposal and highlighted a fundamental flaw in the plan.
According to him, the minimum price for an android phone in Ghana is one thousand and two hundred Ghana Cedis (GHS 1200.00).
He added that assuming no interest is charged and payments are made consistently, buyers would take fifty (50) years to fully pay off the phone.
Prof economist questioned the practicality of such a plan, noting that the lifespan of a phone is significantly shorter than the proposed repayment period, making the scheme financially unfeasible.
“Minimum Android phone is GHS 1200 in Ghana. So let’s do the analysis. Assume the government is subsidizing it so the bank will lend to the buyer at zero interest rate. I don’t want to use compound and annuity effects. Let’s make it simple at zero rate. At GHS 2 monthly payment, the buyer will do 1200/2=600 times payments.
Divide the 600 by 12== 50 years. It will take 50 years to pay for a GHS 1200 phone. Now the question is, what is the life span of a phone? How can you buy something on credit with the payment period being more than its life span? It doesn’t make economic and financial sense,” he wrote.
GHS 1 GHS 2 mobile phone on credit policy is not feasible for monthly payments. pic.twitter.com/4TEMB671sD
— The Prof (@stigue2001) July 23, 2024
During a campaign event in the Northern Region, Dr. Bawumia committed to improving access to smartphones for Ghanaians if he is elected president.
He outlined a plan to partner with mobile phone manufacturers to offer smartphones on a credit basis.
Under this plan, citizens would be able to purchase phones and repay them in monthly instalments as low as GHC1 or GHC2.
Dr. Bawumia highlighted that the goal of this initiative is to bridge the digital gap and enhance connectivity across Ghana by making smartphones more accessible to the general population.
“We will make access to mobile phones affordable,” Dr. Bawumia announced. “We plan to collaborate with phone manufacturers to set up a system where citizens can purchase smartphones on a credit plan.
“This means buyers would pay in small, manageable amounts—just GH¢1 or GH¢2—until the full cost is covered. Our goal is to ensure that everyone has access to a smart device.”