Vice President Dr. Mahamudu Bawumia says though he stands by his assertion that the depreciation of the cedi under the previous government was the result of weak economic fundamentals, that argument does not suffice in the current situation under the Akufo-Addo government.
Dr Bawumia in 2014 took a jab at John Mahama claiming the weak economic fundamentals he was superintending over was the cause of the depreciation of the value of the cedi against major international trading currencies.
In the wake of the recent depreciation of the cedi, some critics jumped on Dr Bawumia’s assertion to conclude the current fundamentals of the economy is weak, but the vice president speaking at the first ever economic town hall meeting Wednesday rejected such arguments.
“If the fundamentals are weak, the exchange rate will expose you; that was true then and and it is true now, it is 100 per cent correct,” he stated.
However, he argued it will be a warp logic for anyone to concluded that the current fundamentals are weak for which reason the strength of the cedi has also weakened.
“If the fundamentals are weak the exchange rate will expose you but it is a warped logic to jump from that to a conclusion that if there is depreciation in your currency then the fundamentals must be weak… it is very warped logic,” he explained.
The vice president argued that the recent shocks suffered by the cedi were primarily caused by “external factors”.
“For example, if your leg is broken, you are going to be unable to walk, and then I am somewhere and someone comes to tell me that this person is unable to walk, can I just conclude that the leg must be broken?
“There can be other reasons why you are unable to walk but the NDC logic will insist in the face of contrary evidence that since you cannot walk, then it must mean your leg must be broken,” the Vice President explained.
Justifying his assertion that the fundamentals were weak under the Mahama government, to Dr. Bawumia “in 2014, exchange rate depreciated by 31.1%, the fiscal deficit was at 10.1% of GDP, and the public rate rose to 70.2% of GDP, inflation had risen to 17% and GDP growth had declined from 7.3% to 4%.
But he said the Akufo-Addo has in the last two years worked to turn things around and placed the economy on under a strong footing for economic growth and private sector progress.