What is incontrovertible is that in the midst of the hues and cry and the propaganda, the management of the Cedi under Nana Addo and Dr. Bawumia has been the best for any first three years of any government within their first term since 1992.
Follow the data here to appreciate how the Bank of Ghana and this government has protected the local currency better. Don’t fall for the propaganda from those who have deliberately decided to attack Dr. Bawumia and government without adducing any data to back their claims. We should as Ghanaians be wise and expose people who are only just interested in attacking others even when they are doing better.
Like him or hate him, Dr. Bawumia has been one of the finest brains and doers we have had at the seat of government since 1992. Human as he is, just like everyone with limited efficiency levels, he may not have met all expectations by Ghanaians, but truly his exploits in government within the last three years have just shown a man who is incorruptible, hardworking, focused, intelligent, respectful and dedicated to his duties. We should just pray for good health and long life for such personalities within our body polity. Ghana can only get better with personalities like him.
The data shows that from 2017 to date (3 years) the cedi has depreciated by an average of 8.73%. This compares favourably with:
27.95% for 1993-1996
25.19% for 1997-2000
11.04% for 2001-2004
6.77% for 2005-2008
10.09% for 2009-2013
18.0% for 2013-2016
What does the data tell you?
- First, in terms of the three year annual average depreciations from 1992 to date, both the best and second best performances are for NPP governments with the best being President Kufuor’s second term from 2005-2008 and the second best with President Akufo-Addo from 2017 to-date.
- But if you look at it from the point of the first term of every government too, you will see the first term of President Akufo-Addo has witnessed the best performance of the cedi relative to the dollar.
- Quite telling from the data I just shared is that the worst performance of the cedi happened under the NDC.
Our economic history, and in fact, the history of all economies that practice the floating exchange rate regime such as the USA, Great Britain, South Africa, and so on, show that exchange rates within such regimes may either appreciate or depreciate.
For highly import dependent and raw material based economies like Ghana, depreciation seems virtually a sine qua non, and this has been the case for all the periods that Ghana has practiced the floating exchange rate regime.
Therefore, before we are able to have a strong export-led economy, increase our industrial and production sectors, deal with the excesses of black market forex trades, have a diversified national debt portfolio with a sizable component owned by locals, amongst others, the best our governments can do is to manage the currency to reduce the speed and rate of its depreciation. In the light of this I think this government has done well and we should simply acknowledge that while tapping on their head to do more.
Interestingly, while the cedi is presently gaining grounds relative to the dollar, those complaining about the depreciation of the cedi are silent about it. A colleague recently had a discussion with his friend from the opposition side about the recent gains of the cedi. While his friend from the opposition admitted the cedi was appreciating, he added that “I’m actually not happy. The rate isn’t good for my transfer”. He was clearly highlighting that, with the appreciation of the cedi, the transfer of dollars he is receiving from abroad isn’t much compared to periods the cedi was depreciating. His arguments were based on his partisan politics and egoistic benefits without focusing on the positive impact of the cedi appreciation on the welfare of the larger populace.
If we all put the political lenses down, we will simply have to appreciate the efforts made by this government to reduce the rate of depreciation. I will urge them to continue and remind them also that, like Oliver Twist, we will continuously ask for more but so far so good. More room for improvement.
It is simply better than before and that is what all voters want. We vote for a change for improvement even if it is not up to our expectation. The fact that there is improvement gives us the hope that with time it will be better. Keep on President Akufo-Addo, Keep on Dr. Bawumia, Keep on Bank of Ghana and do more for all Ghanaians.
By Dr. Muazu Ibrahim
A former student of KNUST (BSc Economics), University of London (MA Development Economics) and University of Witwatersrand (Ph. D Financial Economics). He teaches economics and Finance at UDS but currently on a 6-month consulting assignment in Ethiopia for the United Nations Economic Commision for Africa.