Cedi depreciation puts spotlight on Dr Bawumia
Vice President Dr Mahamud Bawumia's name popped up when the cedi began to depreciate against the dollar in recent days. It is the hope of Ghanaians that the beleaguered currency stabilizes as government takes broader measures to stimulate the economy.
Over the past few days, the cedis has plunged faster under the watchful eye of the new government to the amazement of many. Fury is gradually growing and the drift of the currency towards $1: GH4.7 is stampeding importers. Economic theory does not exist in a vacuum; it gets influenced by a lot of factors. The new government is faced with tricky factors that are swallowing up the cedi.
The chorus of criticism by the main opposition party, NDC, is that the 'Know-it-all Bawumi, must fix the cedi.' Adams Mutawakilu, the NDC’s MP for Damongo, said on Joy Fm that: "they said they are the good managers of the economy. Dr Bawumia claimed he knows everything so he should fix it quickly."
Their harsh criticism can be understandable for Bawumia to take the credit for the good times and take the blame when things go wrong. Bawumia has to expect such criticisms since, anytime that the economy nosedives he would be a prime target.
From the NDC government to the new one, there have been more policies that Bawumia spoke against to bring a quick change in the economy. The NDC did not model exports but imports and artificial ways of auctioning dollars to stabilise the cedis.
Once upon a time in opposition, Bawumia launched stinging attacks on the economic record of the old government, hence, getting described as intellectually awesome in economics. Nonetheless, the depreciating cedi has drawn him an avalanche of criticism. His critics say since he holds the magic wand he has to arrest the cedi from depreciating further.
It won't be fair to blame one person for any economic disparity but Bawumia has become the singular target because he displayed economic shrewdness before the elections. He eloquently convinced voters that he is got the antidote to our mismanaged economy. He said he could get us out of the downturn on to the path of recovery. Voters in every part of this world are only interested in their future, not the past. Hence, Ghanaian voters were easily convinced to vote for the NPP.
One of Bawumia's first master strokes was consistently depicting the old government as incompetent and mismanaging the economy. His brilliant revelations turned out to be the phenomenon that championed the public demand for change
To put it bluntly, the pre-election economic campaign lectures of Bawumia is the reason there is a lot of nostalgia. The economic team of the new government is facing daunting challenges. The spectacular decline of the cedi is bothersome.
The new government needs time to rebalance the economy towards exports. We all know that the cedi depreciation is primarily motivated by high demand of the dollar by businesses on the market. The cedi is inherently sensitive to the dollar movements. Therefore, switching from imports to exports could offer an opportunity for manufacturers and the country.
There are voices saying that Bawumia is a victim of government restructuring. They hold the view that the country now has an experienced financial analyst running the economy thus, the system would bounce back.
Indeed, Dr Mahamu Bawumia has the knack to find the ingredient to stop the depreciating cedi but he cannot just come in like a magician to show off his culinary skill when government has not practically implemented its policies.