The
Vice-Presidential candidate of the New Patriotic Party, Dr. Mahamadu
Bawumia, yesterday took on the much-touted economic gains of the Mills
administration, exposing the various inconsistencies.
Delivering
the Ferdinand Ayim Memorial Lectures, Dr. Bawumia took time to explain
the gains achieved under the eight-year Kufuor administration which,
according to him, turned a Highly Indebted Poor Country (HIPC) economy
into a lower middle income economy.
The over 2000-capacity auditorium was full.
Present at the lecture were NPP gurus as well as representatives from overseas branches of the party.
A
rousing ovation greeted the arrival of party gurus such as former
President John Kufuor, who chaired the function, and his former Vice,
Alhaji Aliu Mahama.
When Dr. Bawumia and Nana Akufo Addo entered the auditorium, they were received with rapturous applause.
Dr.
Bawumia’s ovation was particularly loud. The reason for that was not
exactly clear, but it could be because he was the key focus of the
memorial lecture, or perhaps because many party members were seeing him
in person for the first time since he was re-nominated as running mate.
Whilst
outlining the challenges the NPP administration faced on assumption o
office, he indicated that any attempt to compare the economic
performance within the first three years of the Kufuor administration
and the economic performance of the NDC within its first three years in
office, was like comparing the performance of a Korea-branded Tico car
to a German-made Mercedes Benz or Metro Mass bus.
“By analogy, if
you hand over to me a Tico car and a few years later I work hard to buy
a Mercedes which I then hand over to you, how can you turn around to
say that you want to compare the performance of the Mercedes with that
of the Tico you originally handed over to me?” he queried.
The
NPP running mate proceeded to point out the massive economic
opportunities which had been available to the Mills administration.
He
indicated that the country’s production of oil, coupled with the
virtual doubling of the prices of Ghana’s tow major exports, cocoa and
gold, Ghana’s core terms of trade, had seen an improvement of some 73%
just within the last three years.
These improvements, as well as
the unprecedented borrowing, according to Dr. Bawumia, meant that the
government was placed most fortunately to deliver true better Ghana.
However,
Dr. Bawumia, an economist, indicated that this expected better Ghana
was not the prevailing case. He cited the case of the agricultural
sector which, as pointed out, had seen a drastic reduction in growth
from 7.4% in 2008 to 0.8% in 2011.
That, he said, was worrying in
view of the fact that agriculture was a major sector in Ghana’s economy
and supported so many livelihoods.
Free Falling Cedi
In
tackling the depreciation of the cedi more concisely, the NPP running
mate stated that the free fall of the cedi “is a vote of no confidence
by market players in the management of the economy”.
He added
that as a result of this apparent lack of confidence in the management
of the economy, many players were now anticipating the cedi to dollar
rat to reach 2:1 soon.
He lamented that instead of tackling the
fundamental causes of the rapid depreciation of the cedi, the government
was rather trying to blame speculators for the fall in the cedi.
Single Digit
Dr.
Bawumia also made an issue out of the NDC government’s much touted
‘single digit’ inflation figures since, according to him, inflation was
supposed to be consistent with the fundamentals of the economy and key
economic indicators like cost of living, interest rates and exchange
rates.
He however noted that his was not the case under the
current administration as food prices were hitting the roof, with
families being dislocated.
The economist explained that though
Ghanaians were being told of how government had achieved single digit
inflation, the statistics did not reflect in the lives of the ordinary
people.
That, he said, was evident in the fact that the prices of
basic commodities like sachet water, cement, an ‘olonka’ of gari, maize
etc. as well as petroleum products and tariffs had all been increased
by triple digit percentages and wondered how that could contribute to
real single digit inflation.
“Single digit inflation has not
reflected in a reduction in the cost of living and in this regard has
been rendered practically meaningless. Ghanaians are, in fact,
experiencing triple digit “inflation” in their pain and suffering,” he
stressed.
He observed that while inflation was supposed to be
consistent with interest rate figures, this was not the case, recalling
that when the NPP reduced the inflationary figures it inherited by over
half, the interest rates also saw a decrease tremendously, with banks
chasing people for loans.
He noted that under the NDC, a similar
reduction in the inflationary figures by almost half had seen just a
negligible decrease in interest rates.
The NPP Vice Presidential
candidate also mentioned the unprecedented increase in the public debt
of the nation, stressing that with a rise from GH¢9.6 billion in 2008 to
GH¢25.3 billion at the end of 2011, government had succeeded in
borrowing more than all previous government s combined since Ghana
gained independence.
Dr. Bawumia said one fundamental question that needed to be asked was what all these huge inflows had been used for. |
| |
 |
|
|
Corruption
He equally
bemoaned the high levels of corruption observed in the inflated pricing
of items in education, health and infrastructure and the payments of
huge judgment debts for no work done.
“The overpricing of
supplies contracts in areas such as health, education, infrastructure,
etc. as well as judgment debts paid for work not done is a major area of
concern. Government is not getting value for money and is payment
monies for no work done.
“The increasing resort to single-source
procurement compromises the transparency of the procurement process.
When monies are paid for no work done, as is the case of some judgment
debts, it creates a liquidity overhang (i.e. too much money relative to
output), which finds its way into prices and ultimately results in the
depreciation of the cedi.
“In the case of two such payments of
such judgment debts, the total amount could easily have constructed 750
six-classroom blocks even at the currently inflated prices or 1500 at
more realistic prices,” he stated.
The former Deputy Governor of
the Bank of Ghana pointed out that credibility and transparency were
extremely important in successfully managing an economy.
“You
cannot manage an economy by propaganda. You cannot claim to have created
1.6 million jobs and your Minister for Employment would say he cannot
vouch for that. You cannot ask government officials that when they see a
small goat, they are supposed to tell us that it is a big fat cow and
expect the markets to consider you credible. You cannot claim that all
the gold reserves in the Bank of Ghana have disappeared and expect the
markets to consider you as credible. Today, we have a Green Book touting
“unprecedented” achievements! Hyperbole has its place but certainly
does not belong in the realm of economic management. The best response
Ghanaian can give to the Green book is to show the NDC a red card in the
December 2012 elections,” Dr. Bawumia stressed.
|
|
|
No comments:
Post a Comment