Only mad people say $1 to ¢4 is incompetence but cheer $1 to ¢14 – Prof. Gyampo

A professor of Political Science at the University of Ghana (UG) – Legon, Professor Ransford Gyampo has opined that excessive partisan politics is the cause of Ghana’s current economic woes.

Prof. Ransford Gyampo noted that the exchange rate was a significant factor in the 2016 general election. He said the then-opposition NPP rode on it to ridicule and humiliate the Mahama-led NDC administration resulting in a massive defeat for the incumbent.

However, the so-called team of competent men and women the then-opposition party claimed were ready to reverse the country’s fortunes have failed to ensure a stable currency.

He concurred with the Vice President’s statement in 2014 that “if the fundamentals are weak, the exchange rate will expose you.” However, he wondered how 4 cedis to a dollar can be termed incompetence but 14 cedis to a dollar is genius.

“You needed 4 cedis to get 1 dollar then, and it was a huge show of incompetence. But now you need close to 14 cedis to get 1 dollar. Why should anyone force the argument that we are better off today? Excessive partisanship breeds madness,” the professor said.

Despite the weak fundamentals and the daylight suffering experienced by Ghanaians, Dr Bawumia, the chief architect of the NPP’s economics propaganda in the lead-up to the 2016 election has not stepped back on his boasting.

Commenting on his infamous weak “fundamentals” statement, the Vice president said “It is still true, and I will continue to stand by that statement. We saw that between 2017 and 2021 when the fundamentals in terms of the fiscal deficit, inflation, GDP growth, external balances, and international reserves were fairly strong, the exchange rate was relatively stable,” he argued.

Like the usual government communication, the Vice president shifted the blame to external factors such as COVID-19 and the Russia-Ukraine war. He also blamed it on the self-inflicted banking sector mess.

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

The NPP presidential candidate said though the fundamentals were weakened, they are now back to normal, citing a recent drop in inflation and a stable cedi.

“Inflation reached some 53% at the end of 2022 and you saw the exchange rate depreciate by some 30% in 2022. The fundamentals have strengthened recently, with the declining fiscal deficit, declining inflation, improved external reserves, and so on, and this has resulted in relative stability of the exchange rate. So, my statement still holds true.”

In supporting his claims that the fundamentals are strong and the economy is better than in the NDC era, he said, averages are used to calculate the key figures, not raw data.

“We use averages to measure progress in statistics and economics all the time. It is a valid comparison of the management of the exchange rate under our government versus under the NDC government. The point is that notwithstanding the major global and domestic challenges we have been through, it is remarkable that whereas the exchange-rate depreciation between 2009-2016 averaged 13.9%, between 2017-2023 it averaged 13.1%.”

Dr Bawumia further argued that comparatively, the cedi depreciated less during the Akufo-Addo-led era than during the Mills/Mahama era. He pointed to cumulative averages for the two periods to support his claim.

“The data shows that from 2009-2016, the cedi depreciated cumulatively 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 lower under our government, notwithstanding the severe global shocks we have endured. That is the basic truth”.