The depreciation of the cedi under our government is lower than what we inherited – Bawumia

In recent remarks, Vice President Dr. Mahamudu Bawumia asserted that the current administration has demonstrated superior proficiency in handling the Ghanaian Cedi compared to the previous government led by John Mahama. This claim opens the door for a critical examination of the policies and strategies employed by both administrations in managing the national currency. In this article, we delve into the contrasting approaches of Bawumia and Mahama in handling the Cedi and assess the impact of their policies on the stability of the currency.

Bawumia’s Perspective:

Vice President Bawumia has consistently emphasized the government’s commitment to sound economic management, particularly in relation to the stability of the Ghanaian Cedi. He points to several key factors that, in his view, contribute to the administration’s success in handling the national currency:

1. Macroeconomic Stability: Bawumia highlights the administration’s focus on maintaining macroeconomic stability, including prudent fiscal policies and efforts to reduce inflation, as instrumental in safeguarding the Cedi’s value.

2. Exchange Rate Management: The government, under Bawumia’s guidance, has implemented policies to manage the exchange rate effectively, including interventions to stabilize the currency and measures to address external pressures.

3. Economic Reforms: Structural economic reforms aimed at enhancing productivity, attracting foreign investment, and diversifying the economy are cited by Bawumia as crucial elements in protecting the Cedi from volatility.

Mahama’s Legacy:

In contrast, critics argue that the Mahama administration faced challenges in managing the Cedi, pointing to certain factors that may have contributed to currency depreciation during his tenure:

1. External Shocks: The Mahama administration contended with external shocks, including a decline in global commodity prices, which had a significant impact on Ghana’s export earnings and, consequently, the value of the Cedi.

2. High Inflation: Critics argue that relatively high levels of inflation during Mahama’s term may have contributed to currency depreciation, as inflation erodes the purchasing power of the Cedi.

3. Fiscal Policies: Some critics contend that the fiscal policies pursued by the Mahama government, including high levels of public spending, may have strained the country’s finances and affected the stability of the Cedi.

Conclusion:

The comparison between Bawumia and Mahama’s approaches to handling the Ghanaian Cedi is a complex one, influenced by various domestic and global factors. While Bawumia asserts that the current administration has managed the Cedi more effectively, it is essential to consider the unique challenges faced by each government. A comprehensive evaluation should take into account not only the policies directly related to currency management but also broader economic reforms and external factors beyond the control of any administration. Ultimately, the stability of the Cedi remains a critical aspect of Ghana’s economic well-being, and ongoing efforts to address macroeconomic challenges will be vital for sustaining a resilient and robust currency.