The Vice President Dr. Mahamudu Bawumia says incontrovertible data proves that the management of the exchange rate by the government of Nana Akuffo-Addo is the best by any government in its first term in office since 1992.
Speaking at the Government Town Hall Meeting in Kumasi today on the achievements of the Nana Akufo-Addo government in three years, Dr. Bawumia was unequivocal in stating the proud record of the government as far as the exchange rate is concerned.
“In fact, in the history of the Fourth Republic, President Akufo-Addo has the best performance for any first term government since 1992. Period. All the worst performances happened under the NDC which holds the record for first, second and third worst performances in the fourth republic but they still want to challenge the best performer,” Dr. Bawumia stated, referencing the Bank of Ghana’s annual rate of depreciation of the Cedi to the dollar by all governments of the 4th Republic since 1992.
The Bank of Ghana data, which the Vice President referenced in his presentation, shows that the NPP has managed an annual depreciation rate of 8.7% – the best by any government in their first term, while the most recent NDC government under John Dramani Mahama, registered an annual depreciation rate of 18%, more than twice what the NPP has managed, which means the rate of depreciation of the Cedi under the NDC between 2013 and 2016 was more than twice under the NPP.
With this obvious record in mind, Dr. Bawumia mocked the NDC’s exchange rate management record, and wondered how they have the temerity to say they can manage better.
“The cedi exchange rate under the NPP (2017-2019) is twice as stable as it was under NDC (2013-2016) – average depreciation of 18% compared to 8.7%),” said Dr. Bawumia.
” Under the NDC, our currency was depreciating at the speed of Usain Bolt! Under the NPP we have arrested the rapid depreciation of the cedi,” added the Vice President.
“But why does the NDC, in the face of such incontrovertible evidence, keep insisting they can do a better job of managing the cedi?”
“Ladies and Gentlemen, it is like you take an exam with somebody and he scores 40% and you score 80% and he is trying to convince people that he knows the subject better than you.”
The Vice President went as far back as 2008 to compare the exchange rate management between the NPP and the NDC and ended by exposing how the Cedi depreciated in a rapid manner under the NDC, which he described as Usain Bolt-like.
“Mr. Chairman I would like to take this opportunity to shed some light on the performance of the cedi under the NPP and NDC since 2008. At the end of 2008, the exchange rate of the cedi to the dollar was GHC1.18/US$. At the end of 8 years the nominal exchange rate almost quadrupled to GHC4.2/US$,” Dr. Bawumia noted.
“But thus far under the NPP, the exchange rate has moved from 4.2/$ at the end of 2016 to 5.35/$ (Bank of Ghana). Indeed, for the NPP to match the almost four-fold Usain Bolt-like dash of the nominal level of the cedi exchange rate under the NDC, the cedi exchange rate will have to reach some GH15/US$!”
Strong Economic Fundamentals
The performance of the Cedi against the US Dollar has been widely acclaimed by international financial analysts including the respected Bloomberg, who rated the Cedi as the best performing currency in the world against the US Dollar.
Dr. Bawumia attributed the strong performance of the Cedi to solid economic fundamentals, and also commended the Bank of Ghana for its efforts.
“Thankfully this year, the cedi is performing quite well and is currently the best performing currency in the world against the US dollar (with an appreciation of 3.4% in January) thanks to the excellent management of the Bank of Ghana.”
“The data shows that Ghana’s macroeconomic fundamentals are strong. Indeed, the strength of Ghana’s fundamentals was confirmed recently by Moodys Ratings which changed Ghana’s sovereign ratings from B3 with a stable outlook to B3 with a positive outlook.”
“This is unprecedented for an election year. Standards and Poors also upgraded Ghana’s sovereign credit rating from B- to B with a stable outlook last year.”
” This was the first upgrade by S&P for Ghana in 10 years! This is a strong affirmation of the positive assessment by the international financial markets of Ghana’s economic fundamentals.”
Last week investors placed $15 billion of orders for Ghana’s 41 year Eurobond and Dr. Bawumia said it proved a massive show of confidence in the management of the Ghanaian economy.
“Just last week, Ghana successfully issued the longest-dated Eurobond ever issued by a Sub-Saharan African country with investors placing $15 billion of orders for Ghana’s 41 year Eurobond. The 7 year Bond issued has attracted the lowest coupon rates ever for Ghana at 6.375% compared with the 9.25% Ghana had to pay for a similar Eurobond issued in 2016. This is a massive show of confidence in the Ghanaian economy by investors and just yesterday, Bloomberg rated Ghana as the top candidate for an economic leap in Africa.”