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Opinions of Wednesday, 4 March 2020

Columnist: Nana Kwadwo Akwaa

Facts to prove Nana Addo has repaired the destroyed economy inherited from Mahama

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The debate by the public over who is the better manager of the economy of Ghana between President Nana Addo Dankwa Akufo-Addo and former President John Dramani Mahama has been ongoing for a while.

This debate is what has necessitated this research backed article to help bring clarity to this issue of national concern.

The basis for this research backed article will be the comparison of the confidence levels and also ratings by foreigners with regards to the Ghanaian economic under the respective governments of President Nana Addo and former President John Mahama, and the factors which will be focused on will include Credit Ratings, Eurobond Subscription and interest rates, Currency Management and others.

A. Governments

The Governments under assessment are that of President Nana Addo Dankwa Akufo-Addo and former President John Dramani Mahama. The John Dramani Mahama led Government is between 7th January, 2013 and 6th January, 2017 while the Nana Addo Dankwa Akufo-Addo led Government is also between 7th January, 2017 and 6th January, 2021

B. Credit Ratings By Foreign Institutions

A credit rating is used by sovereign pension funds, wealth funds and other investors as a tool to measure the credit worthiness of a country and thus has a huge influence on a nation's borrowing costs. For the basis of this article, credit ratings of Ghana by Fitch, Moody's, and Standard and Poor (S&P) will be used as the standards for this analysis.

i. Fitch

As at March, 2014, Fitch's credit rating for Ghana was B Negative and improved to B Stable in May, 2017.

ii. Moody's

Moody's credit rating for Ghana was B3 Stable in September, 2016 and has improved to B3 Positive in January, 2020.

iii. Standard and Poor (S&P)

S&P's rating was B- Stable in October, 2014, it improved to B- Positive in October, 2017 and has again improved to B Stable in September, 2018.

From the ratings by the above three (3) reputable international credit rating institutions, it provides proof that the former President Mahama's economy inherited by President Nana Addo has significantly been improved by President Nana Addo under his rein.

C. Eurobond Subscription and Interest Rates

Eurobond is an international bond issued in Europe or elsewhere outside the country in whose currency its value is stated. More over, a bond is a fixed income instrument that represents a loan made by an investor to a borrower

i. 2015

$1.0 billion - 15-year = 10.7%

Oversubscription - 2 times

ii. 2016

$750.0 million - 5-year = 9.2%

Oversubscription - 5 times

iii. 2018

$2.0 billion - 10-year = 7.6%

$1.0 billion - 30-year = 8.6%

Oversubscription - 4 times

Currently the lowest interest rate ever

iv. 2019

$750.0 million - 7-year = 7.8%

$1.2 billion - 12-year = 8.1%

$1 billion - 31-year = 8.9%

Oversubscription - 7 times

v. 2020

$750.0 million - 40-year = 8.8%

(Note: Longest Sub-Saharan Africa's longest bond, pricing was bargained from 9.4% to 8.8%)

$1.3 billion - 6-year = 6.3%

$1 billion - 14-year = 8.0%

Oversubscription - 5 times

From the foregoing, it has given proof that the highest oversubscription and also the lowest interest rate of an Eurobond issued by Ghana were both secured under President Nana Addo and not former President John Mahama; the highest oversubscription was in 2019 and the lowest interest rate in 2018. More over, a careful comparison of all the interest rates for both the long term and short term bonds issued across the years between 2015 and 2020 shows that the interest rates secured under President Nana Addo were all relatively lower than those under former President John Mahama. This as a result proves that the foreign investors have greater confidence in the economy under President Nana Addo than they had under former President John Mahama.

D. Currency Management

A management of an economy of a country varies directly with the nation's currency management.

i. Best Performing Currency

Bloomberg in February 2020 adjourned the Ghana Cedi as the best performing currency against the US-Dollar after its track of about 140 currencies across the globe. According to Bloomberg, the Ghana Cedi came out top due its consistent appreciation against the US-Dollar in 2020. This is a feat that was never recorded under the rein of former President Mahama.

ii. Strength of Currency (Depreciation)

Currency depreciation is a fall in the value of a currency in a floating exchange rate system, and a floating exchange rate is a regime where the currency price of a nation is set by the forex market based on supply and demand relative to other currencies.

Below are the 4-year annual average depreciation recorded under the respective reins of President Nana Addo and former President John Dramani Mahama

Jan. 2013 - Dec. 2016 = 18.0%

Jan. 2017 - Feb. 2020 = 8.7%

The above signifies that the Cedi has been better managed under President Nana Addo than under former President John Mahama.

E. Other factors

i. Best Central Bank

Bank of Ghana, the central bank of Ghana was named as the best central bank for 2019 by the Central Banking Awards. The Central Bank of Ghana was decorated with this award for its splendid management of Ghana's banking sector with particular emphasis on the demonstration of its strengths with regards to the perfect delivery of the banking and microfinance sectors' clean up operation.

ii. Others

A careful analysis of all the aforementioned indicates that the economy under President Nana Addo is rated by foreigners as better than that of which was under former President John Mahama, and that, President Nana Addo has significantly been very splendid with the repair of the bruised and broken economy handed over to him by former President Mahama. In short, President Nana Addo is a better manager of the economy than former President John Mahama.

Hhhmm, may God be praised always


Nana Kwadwo Akwaa


For Interview contact:

Richard Bram ...... 0540462696

Member, Communication Directorate of CTI