The Better Ghana mantra under President John Evans Atta Mills, shouted from the roof-top by agents of the fumbling administration and a sycophantic National Democratic Congress (NDC) propaganda machine, lay in ruins in the face of overwhelming evidence presented by the New Patriotic Party (NPP), in a press statement on the economy, released in Accra, yesterday.
Focusing mainly on the depreciating value of the cedi and its negative impact on the economy generally, the statement lampooned the administration and its economic planners for losing touch with reality, and virtually throwing their hands in the air, in the face of the rapid depreciation of the national currency
“The government appears to be totally lost as to how to resolve this problem, while prices of goods and services keep rising by the day. This makes untenable, the reported single digit inflation.
“There appears to be a disjoint between cost of goods and the inflation rate. The NPP sees this problem as real and serious, and believes that the government needs to confront the problem urgently, before the rising cost of living gets out of control,” the statement advised.
“The Ghana cedi has rapidly depreciated, in relation to the nation’s trading partner currencies like the US dollar and the UK pound sterling, among others, to the extent that not only is it having a very negative effect on the economy, it has also caused massive increase in the cost of living for the ordinary person in Ghana,” according to the statement signed by Mr. Yaw Osafo Maafo, one-time Minister of Finance of the Republic of Ghana, who is Chairman of the Economic Committee of the NPP.
According to the NPP statement, the situation was worsening each day, with prices of goods and services rising astronomically, in complete disregard of the government’s so-called single digit inflation magic.
“The rising cost of almost all consumer items is the result of the NDC government’s inability to keep the currency stable,” the NPP charged in its statement.
The party contending to return to power, asked Ghanaians to be wary of the fact that the cedi haf depreciated by a whooping 77 percent under the moribund administration, currently taking centre stage of the governance process in the country.
“For instance, in December 2008, US$1.00 was sold for GH¢1.10. In June 2009, US$ was selling at GH¢1.40, in December 2010, US$1.00 sold at GH¢1.47, and then in December 2011, US$1.00 sold at GH¢1.64.
As at now, US$1.00 sells at GH¢1.99, thus between December 2008 and June 2012, the value of the cedi, relative to US$1.00, has fallen by 77.3 percent,” lamented the largest opposition party in the country.
The NPP pointed out that the rapid fall of the cedi had raised the cost of doing business in Ghana, as well as this nation’s trade with the international community. It is caused mainly by trade imbalance, occasioned by this nation importing more than it exports.
“In 2011, for instance, we imported GH¢15,348.3 million worth of goods and exported GH¢12.844.55, with a trade deficit of GH¢2,506.08 million.”
The statement wondered how the falling cedi, with its rising cost of goods and services, could lead to the single digit inflation being bandied about. “WHY IS THIS THE CASE?’ the NPP queried.
The statement said the depreciating value of the cedi was leading to increases in the cost of goods imported from abroad, and the widening of the trade deficit with our major trading partners.
On local businesses, the depreciating value of the cedi is crippling local industries and services. “The effect of the cedi’s deterioration is eventually borne by the consumer,” the statement said, explaining that businesses facing huge import bills and taxes would have to pass on the increase to the consumer, before being able to survive. When consumers are unable to absorb the increases, it would lead to those businesses shutting down, with loss of jobs and its attendant unemployment.
The NPP said since the government would have to find more money to service its increased cost, “this additional unbudgeted expenditure would have to be financed through domestic borrowing, crowding out the private sector.
“An adverse effect of the depreciating cedi is that it forced the Bank of Ghana to draw down Ghana’s international reserve from US$5.4 billion to US$4.6 billion, equivalent to an import cover of only 2.5 months. This situation creates an environment which undermines our currency,” complained the NPP.
The NPP said the government’s solution to the cedi crisis, by introducing fees on Foreign Exchange Deposits Account, would rather undermine confidence in the currency and encourage depositors to withdraw their foreign exchange from banks. It also has the tendency of encouraging black marketeering.
In conclusion, the NPP said the government had been poor at managing the exchange rate, the cedi as a national currency, and the economy generally. The party recalled a similar occurrence during the previous NDC regime, and said the same cabal of President John Evans Atta, Mills, Mr. John Mahama, and Paa Kwesi Amissah-Arthur was in charge of the economy.
“At that time, the key members of the then Government’s Economic Management Team were Prof. J.E.A. Mills, as Chairman, John Mahama as member, Dr, Kwabena Duffour, then Governor of the Bank of Ghana, and Paa Kwesi Amissah Arthur, the Deputy Minister of Finance and Economic Planning.
“Today, Prof. Mills is the President, John Mahama is the Vice-President, Dr. Duffour is the Minister of Finance and Economic Planning, and guess what, Paa Kwesi Amissah Arthur is the Governor of the Central Bank. Need we say more?”
Source: The Chronicle
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