The depreciation of the cedi against the US dollar has improved during the NPP, compared to the NDC

Dr. Mahamudu Bawumia, Vice President

Vice President Dr. Mahamudu Bawumia has claimed that the depreciation of the Ghana Cedi against the US Dollar has now improved compared to its value under the previous John Mahama administration.

He maintained that the value of the local currency in the last seven years, under the presidency of Nana Addo Dankwa Akufo-Addo, has been relatively more stable than before.

In an interview with AfricaWatch, he stated that the depreciation of the local currency against the US dollar has been quite sustainable despite the economic challenges the country is experiencing.

“Why not? We use averages to measure progress in statistics and economics all the time. It is a valid comparison of exchange rate management under our government versus the NDC government. The point is that despite the great global and domestic challenges that we have been through, it is notable that while 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 between 2009 and 2016, the cedi cumulatively depreciated 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 less under our government, despite the serious global crises we have endured. That is the basic truth.”

Dr. Bawumia, who is also the New Patriotic Party’s flag bearer for the 2024 general elections, defended his viral statement made in 2016, stating that the NDC administration had weak fundamentals, which is why the cedi was in a sorry state and had exposed them (CDN).

“Absolutely! It is still true and I will continue to defend that statement. We saw that between 2017 and 2021, when the fundamentals in terms of fiscal deficit, inflation, GDP growth, external balances and international reserves were quite solid, the exchange rate was relatively stable.

“But following the COVID-19 pandemic, the Russia-Ukraine war, the banking sector crisis, energy payments for excess capacity and the lack of access to international capital markets, the fundamentals of the economy weakened and the fiscal deficit and debt levels increased,” he explained.

In 2022, Ghana experienced one of its worst economic crises as it defaulted on most of its foreign debt, which amounted to $30 billion.

The country has since been locked out of international capital markets and has now turned to domestic Treasury bill markets for loans.

Ghana, which is currently under the IMF’s 17th bailout programme, on April 13, 2024, reached a staff-level agreement with the IMF Mission team on a second review that will pave the way for a third installment of rescue funds of 360 million dollars.

Ghana’s Expanded Credit Facility program with the IMF will cover a period of three years.

MA/AE

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