The Presidential candidate of NDC, John Mahama, has asked NPP’s Dr. Mahamudu Bawumia five questions on the economy. The five questions are very interesting. However, let me use this opportunity to respectfully provide answers to John Mahama’s questions as follows:
*Question 1:*
Why the exchange rate had skyrocketed to GHS 17 to a dollar?
*Answer to Question 1*
First and foremost, we need to recognize that the unethical buying and hijacking of dollars by the “mafia-bad-people” across the political divide, especially NDC and NPP could also be a major contributing factor to the Cedi depreciation.
The other reasons which have contributed significantly to the skyrocketing of the exchange rate from GHS 17 to a dollar include:
1. The bad choices and decision-making of Ken Ofori-Atta, former Minister of Finance, and Dr. Ernest Addison, the Governor of Bank of Ghana since 2017 up to date.
Mr. Ken Ofori-Atta and Dr. Ernest Addison were expected to prudently manage the Fiscal Policy and Monetary Policy respectively to sustain the appreciation of the exchange rate as well as other indicators of the economy but admittedly these two gentlemen couldn’t get all their decisions and policy choices right contributing to the current situation of the Cedi against major trading currencies including the US dollar.
President Akufo-Addo inability to quickly remove Ken Ofori-Atta from office equally created high levels of anger among the business community, and unfriendly investors’ climate thereby affecting the performance of the Cedi against the dollar.
Dr. Bawumia is NOT responsible for the appointment of Ken Ofori-Atta and Dr. Ernest Addison into the government of Nana Akufo-Addo.
2. Unnecessary ‘family and friends’ interferences in the decision-making of Akufo-Addo’s government is to be blamed as well.
Abuse of power and authority by “family & friends” is a very SERIOUS ERROR that future Presidents of this country should try as much as possible to minimize or eliminate completely from our governance processes.
I sincerely do believe that Dr. Bawumia would NOT dominate his Government with ‘family and friends’ system.
3. Partisan speculative activity, and sometimes dishonourable conduct of Members of Parliament largely affecting the trust and confidence of business & investors’ community.
4. Unnecessary delays in the External Debt Restructuring, and Domestic Debt Exchange Programme (DDEP) have contributed to the depreciation of the Cedi.
5. Lower current account surplus largely caused by a sharp decline in cocoa exports, and increased import demands is a significant contributing factor to the skyrocketing of the Cedi.
6. Payments of Energy Sector debts left behind by John Mahama’s administration.
It is important to state that, the US dollar itself is NOT performing any better against the British Pound (GBP) and the Euro.
If in an unlikely event
John Mahama elected, can he confidently confirm to the Ghanaian people that he would drastically reduce the exchange rate from $1 to GHS 1 as inherited from former President Kufuor’s administration or from $1 to GHS 2 as John Mahama inherited from former President Prof. Mills administration or from $1 to GHS 4 as he Mahama left behind in 2017? How and when would Mahama be able to achieve the exchange rate of a single digit to a dollar?
*Question 2:*
Why has Ghana’s debt risen from GHS 120 billion to GHS 767 billion in eight years?
*Answer to Question 2:*
Ghana’s debt has risen from GHS 120 billion to GHS 767 billion in eight years due to the following reasons:
1. Interest payments on loans, and servicing of bad debts left behind 8 years ago by Mahama’s government largely due to poor contract terms and conditions that Mahama’s administration entered into.
2. Some reckless borrowing and misuse of loans by Ken Ofori-Atta, former Minister of Finance without much consideration to the expert opinion and advice offered by Dr. Mahamudu Bawumia.
3. Massive developmental projects undertaken by Akufo-Addo’s Government in almost all sectors of the economy within the last 8 years which were non-existent during the era of John Mahama’s Government.
From 2009 to 2016 (8years), Mills and Mahama led governments completed 4,636Km of roads and five(5) Interchanges and overpasses.
However, within the last 8 years (since January 2017 to date), Akufo-Addo’s government has successfully completed a total of 12,830Km of roads and added six(6) more major Interchanges. Currently, the government of Akufo-Addo is working on ten (10) new Interchanges across the Country.
Also, the implementation of the District Road Improvement Programme (DRIP), construction of hospitals, renovation of government facilities, construction of new universities, construction of modern classrooms at the level of JHS, SHS, TVET, STEM educational model, and Tertiary institutions, and etc.
4. Sustainable payments of ex-gratia and salaries to John Mahama and some of his staff members respectively within the last 8 years.
The “stupid economy” as being described by H. E. John Mahama has been able to consistently pay the monthly salaries, official traveling expenses and other entitlements of John Mahama and some of his Office Staff members within the eight years without a default.
The “stupid economy” has been able to put light on for John Mahama for the past eight years.
The “stupid economy” has been able to guaranteed free SHS to over 5 million Ghanaians.
5. Sustainable payments of salaries and entitlements to Speaker of Parliament, Members of Parliament, Government Appointees, Public Sector employees and others within the eight years.
6. The banking and financial sector clean up exercise at an estimated cost of over GHS 25 billion, leading to job losses, as well as, affecting consumer and investors’ trust & confidence.
The collapsed of the banking and financial institutions should be partly blamed on the poor approach of John Mahama’s government.
*NOTE*: Personally, l think that, a much more better approach with EMPATHY and turnaround solutions should have been adopted and implemented to save the banking and financial sector instead of the methodology adopted and implemented by the Akufo-Addo’s Government.
7. Sustainable financing of the Free SHS Policy and TVET, aimed at securing the future of several MILLIONS of Ghanaian children and youth across the Country has tremendously contributed to the risen Ghana’s debt to GHS 767 billion in eight years.
With the greatest of respect and in all humility, H. E. John Mahama and majority of our finest Northern Politicians wouldn’t have become who they are today without implementation of Free education in the North as championed by Dr. Kwame Nkrumah, the greatest President Ghana has ever had so far.
8. Sustainable payments of Restored Allowances for nursing and teacher’s trainees within the 8 years.
9. The cost of massive Industrialization projects through the laudable One District One Factory initiative across Ghana aimed at deepening Private Sector growth and participation in the economy as enshrined in Article 36(Economic Objectives) of the 1992 Constitution.
10. Long-term effects of Corruption, Procurement Breaches, and abuse of office by some appointees of Rawlings, Kufuor, Mills, Mahama and Akufo-Addo governments.
11. Long-term effects of the payment of useless judgement debts under Create-Loot-Share Scheme of some officials of Rawlings, Kufuor, Mills, Mahama and Akufo-Addo’s governments.
12. Finally, Black Swan and Structural Breaks are contributing factors to the rising of Ghana’s debt to GHS 767 in eight years.
Black Swan is a consequential occurrence that is almost practically impossible to predict or anticipate. Also, Structural Break is an unexpected change over time which can lead to huge forecasting errors and unreliability in economic data.
Black swans and structural breaks are unpredictable events that affect decisions, management, and policy directions of Economists, Investors, Governments, Policymakers, International Organizations, Multi-laterals etc.
Global COVID-19 pandemic, Russia-Ukraine War, Middle East Geopolitical Tensions, Global Financial Crisis in 2008, H5N1, and even domestically, Flooding, Akosombo Dam Spillage, etc are some examples of Black swans and structural breaks that most of us could not anticipate or even predict the occurrence of such events, let alone thinking or considering their devastating impacts on the national debts, and economy of Ghana, leading to greater indebtedness.
Absolutely, no economic policy or initiatives would be able to work sustainably and stay same or enhance if “All Factors do not remain constant”.
*Question 3:*
Why did inflation rise to 54%
*Answer to Question 3*
1. The reasons for the rising of the Inflation rate to 54% could be the same as the reasons why Inflation rates were 122.87% in 1983 and 59.46% in 1995 under Rawlings government of which John Mahama was part of that government.
2. As I mentioned earlier, Black swans and structural breaks such as COVID-19 pandemic and Geopolitical War between Russia and Ukraine are partly contributing factors to the recorded 54% Inflation.
COVID-19 was a highly unsystematic and uncharacteristic fusion of a deadly disease with a worldwide economic catastrophe leading to economic and human distress in many forms such as severe global recession, contraction in economic activities, brutal financial distress etc.
The Russia-Ukraine War definitely affected global supply chain and demand sides leading to an unparalleled global macroeconomic shocks of uncertain duration and magnitude.
3. The decision of Bank of Ghana to print money to support the sustainable running of the economy by Akufo-Addo’s Government partly contributed to the 54%.
I was quite surprised when I heard H. E. John Mahama was attacking Akufo-Addo’s government over the 54% Inflation rate because sincerely speaking, facts and data analysis are NOT in favour of John Mahama’s argument.
Under the 4th Republican Constitution since 1992, Akufo-Addo’s Government is the ONLY in history to have successfully achieved a SINGLE DIGIT Inflation rates for a consistent 4years as shown below:
2018—-7.81%
2019—-7.14%
2020—-9.89%
2021—-9.99%
The other three Governments which achieved a SINGLE DIGIT for only 1year are as follows:
Rawlings Government
1999—-4.87%
Kufuor’s Government
2002—-9.36%
Mills Government
2011—-8.73%
It is important to state that, John Mahama is the ONLY President since 1992 who could NOT achieved a SINGLE DIGIT Inflation rate throughout his 4years as a President of the Republic of Ghana.
The 4years Inflation rates of John Mahama’s Government are shown below coupled with 4years of Dumsor:
2013—-11.67%
2014—-15.49%
2015—-17.15%
2016—-17.45%
So, clearly, inflation rate of Akufo-Addo’s government averagely is FAR BETTER than the inflation rate of John Mahama’s government. Besides, John Mahama’s government NEVER experienced or encountered Black Swans and structural breaks such as COVID-19 pandemic and Russia-Ukraine War.
*Question 4:*
Why did you borrow GHS 42 billion from the Bank of Ghana?
*Answer to Question 4*
1. Dr. Mahamudu Bawumia as an individual has NOT borrowed GHS 42 billion from the Bank of Ghana for a personal use.
2. According to the Bank of Ghana’s Report, the central bank supported Akufo-Addo’s government with GHS 42 billion so that the government would be able to sustain the running and management of the economy including statutory payments of salaries and entitlements to Public Sector Employees, honouring payment of Procurement contracts etc. Perhaps, H. E. John Mahama monthly salary as a former President was paid out of the GHS 42 billion.
*NOTE:* I sincerely think that, the decision of Bank of Ghana to support Akufo-Addo’s
government was inappropriate. If Ken Ofori-Atta was prudent enough and efficient with the management of the Fiscal Policy of Ghana we wouldn’t have gotten to the point that the Bank of Ghana has to support government with GHS 42 billion.
However, I think that per the experience of John Mahama, he should have directed question 4 to President Akufo-Addo, Ken Ofori-Atta, and Bank of Ghana because Dr. Mahamudu Bawumia has no power & authority under the 1992 Constitution as far as the decision-making and management of the Country’s Fiscal Policy and Monetary Policy are concerned.
*Question 5*:
Why has he run away from the economy to digitalization?, he should come and talk about the economy.
*Answer to Question 5*
This particular question is below the belt and quiet strange without any merit because
Economy has several dimensions including digitalization. If Dr. Bawumia talks about digitalization it is the same as talking about the economy, with extensive focus on one dimensions of economy.
Modern economy doesn’t revolves strictly around macroeconomics and microeconomics.
Respectfully, I would like to humbly bring it to the attention of H. E. John Mahama that, there are several dimensions of an economy in the 21st century such as:
Technology Economics, Industrial Economics, Agricultural Economics,
Economics of Infrastructure, Health Economics, Education Economics,
Financial Economics,
Energy Economics, Digital Economy, Blue Economy, Red Economy, Green Economy, etc.
Does it mean that, H. E. John Mahama would NOT consider or factor any of the aforementioned dimensions of Economy in the implementation of his proposed 24-Hour Economy if in an unlikely event that he get elected again? A floating voter would be highly interested in Mahama’s answers for decision making.
Political leaders around the world are utilizing the various dimensions of Economy to see how best they would be able to transform their respective Countries into advanced economies with superior competitive edge.
Dr. Mahamudu Bawumia is still talking about the economy with an extensive focus on Technology Economics(Digitalization) and Digital Economy(Digitization).
Economic powerful Nations in the world are driven by Technology Economics and Digital Economy.
