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Monday, October 3, 2022

Cedi Twice Stable Under Nana –Bawumia

Vice President Dr. Mahamudu Bawumia

VICE PRESIDENT Dr. Mahamudu Bawumia has indicated that Ghana’s local currency is twice stronger under President Akufo-Addo than it was under former President John Mahama and his National Democratic Congress (NDC) administration.

The Vice President, who disclosed this last Thursday at Millennium City, Kasoa, in the Central Region, was the main speaker at a public lecture dubbed, “Bawumia Speaks on the Economy.”

It was a timely delivery targeted at setting the records straight on some wild allegations being spewed out by the opposition NDC about the Akufo-Addo administration’s strategic management of the economy, despite the problems visited by the COVID-19 and the Russia-Ukraine war on most economies globally.

In a live broadcast from the Pentecost Convention Centre, where he addressed a national TESCON conference jointly organised by the Tertiary Education Students Confederacy (TESCON) of the NPP and the Danquah Institute (DI), he averred, “The data shows a clear dichotomy for the depreciation of the cedi between 2013-2016 and 2017-2021. Cedi depreciation reached a high of 32.5% in 2014 and declined to 9.7% by 2016. The rate of depreciation further declined to 4.7% in 2017 before increasing to 12.9% in 2019 and declining again to 3.9% in 2020 and registering 4.1% in 2021.”

The data, which he credited to the Bank of Ghana, he said, also “shows that average exchange rate depreciation during 2017-2021 period at 6.8% under our government is more than twice as stable than during the 2013-2016 period, where the average depreciation rate was 18%.”

“In fact, in the history of the Fourth Republic, the worst performances for exchange rate depreciation happened during 1993-2000 and 2009-2016,” he said.

He was, however, quick to admit that “the first quarter of 2022 has however seen the sharpest first quarter depreciation of the cedi since 2015,” and that data from the Bank of Ghana shows that at the end of March the cedi had depreciated by 15.5%.

On the question of why the country witnessed such a major depreciation of the exchange rate in the first quarter, Dr. Bawumia, a celebrated economist and former Deputy Governor of the Bank of Ghana, said “a number of factors can be adduced; the financial markets assessment of the 2022 Budget generally concluded that the projected 40% increase in revenue underpinning the budget would likely not materialise and, therefore, the deficit will be higher than projected.”

BY Charles Takyi-Boadu

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