Bawumia: Cedi depreciation has been lower under NPP

The flagbearer of the NPP, Dr. Mahamudu Bawumia, has stated that the cedi’s value under the ruling administration has shown relative improvement compared to what it was under the NDC.

He said that despite global and domestic challenges, the average exchange rate depreciation between 2009–2016 and 2017–2023 was only 13.1%, indicating that averages are crucial for measuring progress in statistics and economics.

“Why not? 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 and 2016 averaged 13.9%, between 2017 and 2023 it averaged 13.1%. That is a  fact,” he said.

“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.”

Dr. Bawumia maintained his 2016 statement that “when the fundamentals are weak, the exchange rate will expose the government,” blaming the volatility of the current exchange rate on global crises such as the Russia-Ukraine conflict and the COVID-19 pandemic.

“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 said.

“But 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 Vice President emphasised the recent stabilization of the exchange rate due to the decline of the fiscal deficit and inflation and improved external reserves.

Dr. Bawumia made these remarks in an interview with Africa Watch Magazine on Monday.