The call for a debate by Dr Bawumia on the questions about the weak economic fundamentals is unwarranted. In 2016 Dr Bawumia made 170 statements on some of the key fundamentals of the economy and was applauded for his efficient communication on the fundamentals. He was then called the ‘economic wizard’. In one of his numerous lectures he made the famous statement; if the fundamentals are weak the exchange rate will expose you”.
At number 13 of his 170 statements or questions, Dr Bawumia stated that Ghana is experiencing high levels of public debt (which was then less than Ghc 120 billion) and stubbornly high inflation rate (which was then less than 17%). Under Dr Bawumia’s (the economic wizard) government, Ghana’s public debt stands at Ghc 761.2 billion. The economic wizard’s government have increased Ghana’s Public Debt by Ghc 641 billion from Ghc 120 billion in 2016. The highest GDP to debt ratio under John Mahama was 55.9% in 2016. The lowest under the Dr Bawumia’s government is 57% in 2017. Under Dr Bawumia as the head of EMT, thier lowest GDP-debt- ratio is even higher than John Mahama’s highest GDP-to-debt ratio (55.9%). In 2022 the GDP-debt-ratio stood at 92.4% unprecedented in recent times and currently stands at more than 76% after the debt restructuring (the ‘draconian’ DDEP and suspension of interest payments on loans with bilateral creditors).
At number 13 of his 170 statements or questions Dr Bawumia decried an inflation rate of less than 17% which ended at 15% in 2016. Under Dr Bawumia’s government and as the Chair of the EMT Ghana recorded the highest inflation rate at 54% in December 2022. Inflation currently stands at more than 21%.
At number 31 of Dr Bawumia’s 170 statements, he damned the government over the stability of the cedi. He stated that the cedi had depreciated from Ghc 1.2 in 2009 to the dollar to Ghc 3.95 to the dollar in 2016 ( which as of June 2012 stood at Ghc 1.89). Under the economic wizard’s EMT, the cedi has depreciated from Ghc 4 to the dollar in 2016 to Ghc 17 to the dollar in 2024, nearly times 5.
The 2022 credit downgrade was as a result of excessive borrowing by the Dr Bawumia’s government. This limited government’s access to international funding. It caused the government to borrow from the Central Bank to support it’s interest payments on government debts and other government commitments such as salaries etc. This was a clear case of a failed Economic Management Team chaired by Dr Bawumia.
Evidently, Dr Bawumia may be justified to move away from the economy to digitalization (his new comfort zone) because the exchange rate has indeed exposed his weak economic fundamentals. But H.E. John Dramani Mahama on behalf of Ghanaians wants Dr Bawumia to explain to Ghanaians why he has fled from his old love (the economy) to digitalization.
Dr Bawumia doesn’t need a debate to answer these questions he can just organise his famous lectures to address the questions on;
a) the high unsustainable public debt (Ghc 762 billion) and the high GDP-to-Debt ratio (from 55% to 92% in 2022 and 83% as at July 2024);
b) the high inflation rate( 54% in December 2022 and more than 20% in November 2024);
c) the depreciation of the cedi from Ghc 4 to the dollar in 2016 to Ghc 17 to the dollar in November 2024.
d) the credit downgrade that resulted in government borrowing from the Central Bank; and
e) why has he fled from the discussions about the economy( now his nemesis) to digitalization (his new comfort zone)?
Source : Samuel Yaw Adusei
Former deputy Minister for Housing
