Vice President Dr. Mahamudu Bawumia, has mounted a strong defense for the government’s handling of the Ghanaian economy in light of rising criticisms from stakeholders over the last few years.
In a lecture on the state of the economy on Thursday, he maintained the management of the fundamentals of the economy has been successful even amidst the COVID-19 pandemic.
The speech was necessitated by concerns over what many described as the loud silence of Dr. Bawumia in times of economic hardships.
This was at a time when prices of goods and services were recording daily increments, fuel prices hitting an all-time high, transportation costs up to theroof,f and a depreciating cedi.
The Vice President in his address sought to answer questions ranging from what has happened to the economic fundamentals, to how the government is solving the current economic challenges.
Critics have consistently debunked attempts by the government to blame external factors for the current economic situation. They have argued that COVID-19 alone could not be a contributor to the debt situation and accused the government of indisciplined expenses.
In an interesting twist, the Vice President alluded to these claims. He however added charges on extra capacity of power produced and the cost of financial sector clean-up as causes of the debt situation.
On the performance of the cedi, the Vice President attributed the recent depreciation, which is the highest since 2015, to a number of factors including the controversies over portions of the budget and lack of access to sovereign bond markets.
“The chaotic battle in parliament over the budget created uncertainty and signaled to the markets that the government may not be able to get most of its programs passed in a tightly balanced parliament. This further reinforced the lack of confidence of investors in the budget.”
“Furthermore, delays in implementing major tax reforms such as the benchmark policy reversal, tax exemptions bill, common platform for property tax, and the review of fees and charges appeared to support the assessment of the market that the government will have difficulty in getting its programs through parliament,” he claimed.
The controversial 1.5 percent electronic transfer levy which was recently passed into law is set to start in May. But prior to its implementation, data from the Bank of Ghana shows a decline in MoMo transactions and interoperability in the past few months.
Despite these concerns, Vice President maintains Ghana has the fastest growing mobile money market in Africa.
“Ghana is the first country in Africa and one of the few in the world to achieve this type of interoperability between bank accounts and mobile wallets. Even in the USA, the Federal Reserve Bank does not have interoperability in its Real Time Payments Network. In this area, we are way ahead of most countries in the world.”
“Achieving mobile money interoperability (MMI) in Ghana is therefore no small feat, especially at the cost ($4.5 million) we did it. The data shows that because of MMI, Ghana is the fastest growing mobile money market in Africa.”
