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General News of Tuesday, 19 June 2018

Source: citifmonline.com

Stop cheap propaganda and fix Cedi – Ato Forson fires Bawumia

The Ranking Member on the Finance Committee of Parliament, Cassiel Ato Forson, has told Vice President Bawumia to focus on alleviating pressure on businesses instead of engaging in “pedestrian propaganda” on the depreciation of the cedi.

In a statement, he said it would benefit the Vice President greatly “if he cut back on the haughtiness and focused on reining in the cedi which is in free fall at the moment and stems the anxiety and anguish of businesses and Ghanaians who are reeling under severe hardships at the moment.”

This is after Dr Bawumia subsequently issued a response to former President John Mahama’s criticism of the Akufo-Addo administration’s handling of the Cedi.

“In the entire eight years of President Kufuor’s (NPP) rule from 2001 to 2008, the price of the Cedi relative to the dollar moved from GHc0.7 to GHc1.2, representing a depreciation of 72%. However, in the eight years rule of both Presidents Mills and Mahama (NDC) from 2009 to 2016, the Cedi depreciated by 247%, moving from GHc1.2 to GHc4.2. Such higher rate of depreciation in less than a decade is simply unacceptable and signifies high levels of incompetence,” Dr Bawumia said.

But Mr Ato Forson contends that the Veep’s calculations are flawed.

“While it is known that the use of false methodologies is very typical of the Vice President, he could have consulted the Bank of Ghana who would confirm that the rate of change formula is not what is used to calculate exchange rate depreciation.”

“To determine the accurate rate of depreciation or appreciation, the current rate is subtracted from the previous rate and the answer divided by the current rate which is then multiplied by 100 [(Previous Rate-Current Rate)/Current Rate] x 100,” Mr Ato Forson explained.

“If Dr Bawumia was minded to do an accurate and honest calculation, the respective percentage of depreciation would have been 41.6 percent under President Kufour; 71.4% under Mills/Mahama; and 6.6% for the 15 months of the Akufo Addo/Bawumia government. These figures are significantly lower than the 72%, 247% and 7% quoted by Dr Bawumia in his statement.”

In his view, Dr Bawumia was reaching for low hanging fruits by comparing “15 months of the government he is part of eight years of previous governments.”

Cedi politics

John Mahama first sparked the debate when he took to social media last week to ridicule the government over the cedi which is depreciating against major trading currencies. Mr Mahama had complained about the current cedi to dollar exchange rate, which he said currently stands at GHc4.7 to $1.

He accompanied his words with a short video of Dr Bawumia supposedly expressing misgivings about the NDC’s handling of the local currency while they [NDC] were in power.