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Bawumia is NDC’s main headache – Baako





The brilliance of Vice-President Dr Mahammudu Bawumia presents a major challenge to the main opposition National Democratic Congress (NDC), Abdul-Malik Kwaku Baako, Editor-In-Chief of the New Crusading Guide has said.

According to him, Dr Bawumia is a good communicator, who is able to simplify economics to the understanding of everyone.

“It appears Dr Bawumia is a problem for his political opponents. I have been around Ghanaian politics for a very long time and I can tell you Dr Bawumia is one of the best communicators we have ever had. He is articulate, he is coherent and he is focused,” Mr Baako said on Metro TV’s Good Morning Ghana programme.

He added: “He makes economics very simple. He is able to reduce very complicated issues, so, I see why he represents a problem and a challenge for some people. I think the town hall meeting was a useful exercise.”

Dr Bawumia on Wednesday, 3 April 2019 said at a town hall meeting of the Economic Management Team that it is “warped” reasoning for the NDC to say that the fact that there has been a fall in the value of the cedi necessarily means Ghana’s economic fundamentals are weak.

Dr Bawumia said the cedi fall was largely due to external factors rather than weak fundamentals of the economy, unlike, in his opinion, it pertained in 2014 when he (Dr Bawumia), famously said: “If the fundamentals are weak, the exchange rate will expose you”.

According to Dr Bawumia, “Factors such as the inflation rate, the balance of trade, the fiscal balance, money supply, are what we refer to as the fundamentals. But speculation and expectations about these fundamentals; external shocks such as oil price increases, can also have powerful short-term effects on the exchange rate.

“When we see pressures on the exchange rate, first we need to determine where these pressures are coming from or whether the pressures are transitory or permanent. And as every astute central banker knows, even with strong economic fundamentals, speculation, expectation and investor sentiment can exert pressures on the exchange rate.

“Ladies and gentlemen, you will recall that I stated in 2014 that: ‘If the fundamentals are weak, the exchange rate will expose you’. That was true then and it’s true now. It is 100 per cent correct.

“But it is warped logic to jump from that to a conclusion that if there is depreciation in your currency, then the fundamentals must be weak. Do you understand the logic? If the fundamentals are weak, the exchange rate will expose you, but if the exchange rate moves, you cannot jump to that conclusion that the fundamentals are weak. That defies logic”, Dr Bawumia said, adding: “There could be external factors causing the exchange rate depreciation”.






Source: classfmonline.com



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