Cedi down 26%, not 7% – Minority to Bawumia

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The Minority in Parliament (MP) has said that the rate of depreciation of the Ghana cedi in relation to the U.S. dollar, has exposed Vice-President Dr Mahamudu Bawumia.

Critics have blamed government policies for the weakening of the cedi against the U.S. dollar.

The cedi has narrowly neared the GHS5 to $1 rate.

Deputy Minority Leader in Parliament, James Klutse Avedzi, said the fall of the cedi indicates that the fundamentals of the economy are weak.

Mr Avedzi said Dr. Bawumia “claims that even if you do propaganda about the economy and if the fundamentals of the economy are weak, the exchange rate will expose you. The same measure applies to him now; that, if the cedi is still depreciating, it means that the fundamentals of the economy are weak. So, the exchange rate is exposing him”.

The Minority MP was responding to Dr Bawumia assertion that the Akufo-Addo government under the New Patriotic Party (NPP), has performed far better in managing the depreciation of the cedi in relation to the U.S. dollar than the erstwhile Mahama-led National Democratic Congress (NDC) administration.

Making reference to data from the Bank of Ghana to buttress his point, Dr.Bawumia said: “The Cedi exchange rate increased from 1.1 to 4.2 to the Dollar between 2008 and 2016. At the time we assumed office, the cedi exchange rate was some 4.2 cedis to the Dollar. Today, if you look at the Bank of Ghana data, it is at 4.75 to the dollar. It is, therefore, absolutely clear and incontrovertible that we, as a government, under Nana Addo Dankwa Akufo-Addo’s leadership, and the management at the Ministry of Finance; and the Bank of Ghana, it is clear that we have managed the exchange rate much better than our predecessors”.

Dr. Bawumia made these remarks at the launch of the School Entrepreneurship Initiative programme at the Ghana Senior High School, Tamale, on Friday, 14 September 2018.

In his view, “The exchange rate between the cedi and the dollar has remained relatively stable when compared to the movements in other currencies against the dollar. The reason for this is because of the relatively stronger fundamentals that we have in our economy”.

Dr Bawumia said, for instance, that the Argentina Peso has depreciated by 50.2 per cent; Turkish Lira by 42 per cent; South African Rand by 19.2 per cent; Indian Rupees by 11 per cent; and the UK Pound Sterling by 4.2 per cent, against the U.S. dollar, hence Ghana has performed creditably by managing a seven per cent depreciation within the same period.

However, Mr Avedzi told Class91.3FM’s 505 news programme hosted by Valentina Ofori Afriyie that: “You don’t come back and tell us that you are doing better than the other party. You said you will arrest the falling value of the cedi, but he has not been able to do it; you have failed to do it, so, it is not for him to tell us that he is performing better than the previous government. That is not the case”.

The Ketu North Constituency MP rejected Dr. Bawumia’s calculation that the cedi has fallen by just seven per cent in relation to the U.S. dollar since January.

For him, the depreciation “is well over 26% per cent, so, we will not take his computation”.

ABOUT: Ellsamwise King

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