The Vice President, Dr. Mahamudu Bawumia has hit back at the opposition National Democratic Congress over management of debt levels and its impact on key economic indicators, and also exposed the NDC in the process.
In a two minute and 49 seconds video, Dr. Bawumia defended the government’s management of the economy and made a comparative analysis between the NPP and the NDC, of records of debt management levels and their impact on the economy – analysis, which will surely rile the NDC, as it showed the NPP as better managers of the economy.
The video was recorded during the Vice President’s address to the NPP’s students group (TESCON) branch of the University of Cape Coast over the weekend during their annual conference.
The Vice President, a former economics assistant professor, and central banker took the students, and perhaps, the NDC, through the rudiments of economics, by telling them the relationship between maintaining prudent debt levels and its impact on positive economic indicators.
Dr. Bawumia’s riposte was in response to the NDC’s claims of increasing debt levels under the NPP administration, but the Vice President told the NDC of jow prudent the Akufo-Addo government has managed Ghana’s debt levels, which is proven by positive economic indicators, unlike the NDC who couldn’t manage the debt levels and left the economy in ruins with declining indicators.
“I want to let you think about one thing; you hear the NDC saying aah, the debt level has gone up. Sure, the debt level has gone up, but economic levels have not gone down. The debt level has increased yes, but why do we want to maintain prudent debt level?,” Dr. Bawumia noted
“When you teach economics, you have to ask your students that question; why is it that we want the debt levels maintained at prudent levels? The reason is that, if you do not manage your debt levels properly, it will affect your exchange rate, it will affect your interest rate, it will affect your inflation and it will affect your growth.”
“You’re managing the economy in a way to look at its impact on these variables; exchange rate, interest rate, inflation, and growth rate. That is the issue.”
Having explained that economic principle in simple terms, the Vice President then switched his focus on the NDC and exposed their “incompetent” economic management record, in typical fashion.
“When the NDC was in government, well way before, they took us to HIPC. They had mismanaged the debt levels such that we had very high inflation, very high exchange rate depreciation, very high interest rate, and low growth. That was the legacy they left us,” Dr. Bawumia said.
“By the time we were going towards 2016, the debt levels had increased such that inflation was going up, the interest rate was going up, exchange rate depreciation was going up and growth also coming down, and they had to run to the IMF for a bailout. Wasn’t that the case? That was NDC economic management.”
Unlike the NDC, Dr. Bawumua indicated, economic levels and growth are up, which, he said, shows the clear difference between the competence of the NPP and the incompetence of the NDC.
“Our debt levels have gone up, but what has happened to inflation? It has come down. What has happened to exchange rate depreciation? Depreciation has come down. What has happened to the interest rate? It has come down. What has happened to growth? It is going up.”
“That is a difference in economic management. There is one that is incompetent and there is one that is competent. If you choose the NDC, you go to the incompetent path, and if you choose the NPP, you have competent economic management.”
Indeed Dr. Bawumia is right with what he describes as prudent management of debt levels, and its positive impact on economic levels, or indicators.
According to data from international and local economic institutions, the rate or average rate for every indicator in the past 4 years, and ultimately, growth, show that the NPP recorded better figures than the last NDC administration led by John Mahama.
For instance, Fact Check Ghana data indicates that the economy under the Akufo-Addo government in 2017, 2018, and 2019, before covid-19, registered a growth rate of 8.144%, 6.263%, and 6.478% respectively (before Covid-19 ruined it down to below 1%), while under the NDC between 2013 and 2016, the economy shrank from 7.313% in 2013 to 3.448% in 2016 before the NPP assumed office.
For the depreciation rate of the Cedi, which is the most talked-about indicator, Dr Bawumia is right that there has been a better indicator. The average depreciation rate of 7.52% in the first term of the Akufo-Addo administration between 2017 and 2020, is the best depreciation rate for any first-term government in the 4th Republic, and it is second only to the best of 6.77% depreciation rate, which was recorded in the 2nd term of the Kufuor administration between 2005 and 2008.
And in spite of the effects of the Coronavirus pandemic, the cedi, recorded a 3.9% depreciation rate in 2020, which remains the best in any year in the 4th Republic.
The Ghanaian economy is one of the few economies projected by international analysts as being on track to getting out of the effects of the Coronavirus pandemic.
According to global economic analysts, Ghana’s economic growth in 2021, is projected to increase to about 4%.