Vice President Dr. Mahamadu Bawumia has disclosed that the fundamentals of Ghana’s economy are stronger compared to what the government inherited in 2016.
Ahead of the 2016 elections, then running mate to the NPP’s presidential Dr. Bawumia in a public lecture famously stated that “If the fundamentals are weak, the exchange rate will expose you”.
Three and half years after that statement the vice president is emphatic that with depreciation around 2%, the cedi is now stronger than it has ever been since 1992 despite the effects of he Corona Virus pandemic.
“The fundamentals are now strong and the depreciation is around 2%. Since 1992 the cedi has not been this strong despite the devastating effect of COVID-19 globally”, Dr. Bawumia stated on Peace FM’s Kokrokoo Morning show.
HE The Vice President intimated that though the Cedi is currently about GH¢5.7 against the US Dollar, it has been within the rate of the fundamentals.
He further revealed that under the erstwhile NDC government, the exchange rate was depreciating at a rate of 18 percent on the average whereas under the NPP administration it has reduced 8.7 percent, about half the rate of depreciation before the government came into office.
“When the NDC came into office in 2009 the cedi was 1 dollar =1 Cedi and by the time they left office it was 1 dollar = 4 Cedis. This means it was a quadrupling of the nominal rate they met. If we had also quadrupled we would have had an exchange rate of 1 dollar = 16 cedis”.
“But today we are less than 6 cedis to a dollar. If you talk about depreciating at an exchange rate of about 8.7 percent on the average and having inflation around the same figure it means we have done well and the exchange rate is consistent with the fundamentals”, he explained.