Ken Ofori-Atta, current Finance Minister and Seth Terkper, former Finance Minister
The Cedi politics that usually generates heated debate has reared its ugly head, as a war of words has ensued between the ruling New Patriotic Party (NPP) and the opposition National Democratic Congress (NDC).
Currently, the NDC and the NPP are claiming the bragging rights over the management of the local currency following the poor performance of the Cedi against major foreign currencies, particularly the United States Dollar, in recent times.
Cedi’s Performance
As at the close of last week, the Cedi had lost some 5.68% in value/depreciation in a Year to date (YTD) analysis to major trading currency, the Dollar.
According to Bloomberg, it’s a worldwide trend.
Bloomberg also mentioned currencies like the Argentine Peso whose YTD depreciation stood at 50.24%, Turkish Lira (42.30%), The Rand (19.24%), Indian Rupee (11.27%), The British Pound (4.29), The Euro (3.52%), as well as the Zambian Kwacha (3.05).
NDC Adamant
In spite of the trend and ample prudent economic measures being taken by the government to build a stronger economy, the NDC is adamant and appears to be singling out Vice President Dr Bawumia, who is the head of the Economic Management Team, for bashing.
Bizarrely, these NDC elements, who appear to have no expertise in economic management are mainly making the noise.
Felix Kwakye Ofosu, a former Deputy Minister for Communications, posted on social media platform Twitter that the Vice President engaged in ‘cheap talk’ as far as plans for strengthening the local currency were concerned.
“The exchange rate has hit GH¢5 to a Dollar. No one has proven that talk is cheaper than our current Vice President.”
The Bawumia Factor
Dr. Bawumia, who has in-depth knowledge of economic management, was a thorn in the flesh of the NDC during the previous Mahama administration over its economic policies.
The Vice President has been leading the EMT to clear the ‘mess’ left behind by the NDC since he became Vice President.
The NPP members have always challenged their NDC counterparts to back their criticisms with data.
They said inflation has been at the lowest level in the last four years and interest rates are lower than they were under Mahama-led NDC administration.
They insisted that GDP growth rate is higher than it was under the previous NDC administration, debt-to-GDP ratio is lower than it was under Mahama-led government.
Mid-Year Budget
In July during the mid-year budget review, Finance Minister Ken Ofori-Atta said the performance of the Cedi during the 18 months of the Akufo-Addo government had been impressive compared to the last six years under previous administration.
“The year-on-year depreciation of the Ghana cedi against the US dollar stood at 4.9% in 2017. It was 9.7% in 2016. It was 15.7% in 2015. It was 31.3% in 2014 and 17. 5% in 2013,” he said on the floor of Parliament, adding “a further interrogation from the Bank of Ghana shows that the depreciation in the first half has been the best since 2012. It’s instructive to note that from January 2018, to June 2018, the Ghana cedi depreciation against the dollar was 2.4% as against 17.2% in 2012 , 3.3 % in 2016 and 3.7% in 2017. If this is anything to go by, it means the 2018 performance of the Ghana cedi is likely to be better than even the 4.9 percent we experienced in 2017 which was an all-time low compared to the four years of the Mahama administration.”
He added that the Cedi had come under pressure, despite the strong fundamentals devised by the NPP government to stabilize the currency.
“Despite the strong fundamentals we have seen the cedi come under pressure primarily due to external pressures. In fact, Mr. Speaker, aside from the short transitory volatilities recorded in June this year the average performance of the dollar (cedi) has been one of the best in recent years,” he said.
Mahama’s Argument
A few months ago, former President John Mahama taunted the NPP government about the Cedi to dollar exchange rate, which he said stood at GHc4.7 to $1.
He supposedly touted the NDC administration’s handling of the local currency at the time on Facebook.
Bawumia’s Reply
Dr Bawumia subsequently issued a response, saying Mr. Mahama’s criticism only exposed his lack of understanding on issues bordering on crucial aspects of the economy.
“It has been brought to my attention that former President Mahama has recently been talking about exchange rate depreciation. The former President’s comments once again, sadly demonstrate his lack of understanding on key aspects of our economy,” said the Vice President.
Dr. Bawumia explained that “the NPP administration has demonstrated by far to better managers of the Cedi than the NDC.”
By William Yaw Owusu