Minority poses 5 questions to Bawumia over economic challenges

Addressing the media on the ‘true’ state of Ghana’s economy, Minority Spokesperson on Finance Cassiel Ato Forson accused the ruling NPP government of using lies and propaganda as their tool to gain the confidence of Ghanaians prior to the 2016 general elections and still using deceit to manage the economy after taking over.

Recalling some statements Dr. Bawumia made over the strength of the cedi to the dollar after NPP assumed office, the Minority in Parliament stated that “the Vice President claimed to have stabilised the cedi in the first 100 days of the NPP government. The Vice President declared that, the cedi had been arrested and the keys handed over to the Inspector General of Police. It was obvious at the time the Akufo-Addo government was only reaping the benefits of the hard work put in by the Mahama administration before its exit”.

According to the Minority, the downturn of fortunes in the local currency shows clearly that the Akufo-Addo government has failed to sustain the gains.

Due to that, the Minority claims market and investor confidence is very low now because the Akufo-Addo government has not been transparent with investors regarding the recent policy announcements and financing decisions.

The cedi until Thursday, March 14 had fallen deeply against international currencies especially the dollar, by some 5 percent trading at around GH¢5.90.

It has however begun to record some marginal appreciation against the dollar closing at around GH¢5.56 against the dollar on March 15, 2019; a development which is largely due to the injection of dollar cash by the Bank of Ghana last week.

But the Minority in Parliament briefing the media purported that the figures showing on google have been manipulated by government and not the true reflection of the dollar against the cedi.

According to them, the cedi isn’t appreciating but rather government’s social media gimmicks are at play trying to confuse ordinary Ghanaians.

The Minority therefore wants Dr. Bawumia to provide answers to these five questions relating to the economy and how he plans to tackle the depreciation of the cedi.

Read below the five questions the Minority is demanding answers for

1. Why would an independent central bank with focus on price stability decide to reduce the monetary policy rate against its own research findings that US policy normalisation is strengthening the US dollar and causing investors to move funds away from emerging economies and that upward adjustments in domestic prices of petroleum products are likely to affect transport and utility prices?

2. Why would an independent central bank with a focus on price stability to lower the policy rate in the face of dwindling net international reserves and a rising interest rate abroad?

3. Why would an independent central bank with focus on price stability decide to reduce the monetary policy rate in favour of growth which has been projected to be higher than the previous year’s while the local currency is under pressure?

4. Why would an independent central bank with a focus on price stability decide to lower the policy rate in the face of excess liquidity in the banking sector emanating from banks increasing their minimum capital by over 100 percent while the local currency is fast depreciating?

5. Clearly, an economy cannot be externally unstable and internally stable. How can a rapid exchange rate depreciation be accompanied with a single digit inflation rate as captured by the posted macroeconomic indicators?