[ad_1]
Felix Kwakye Ofosu (left) and Dr Mahamudu Bawumia
Former Deputy Communications Minister Felix Kwakye Ofosu rejected claims by Vice President Dr Mahamudu Bawumia that although debt levels are currently high, the economy has been better managed by the Akufo-Addo administration.
Mr Kwakye Ofosu said the Vice President did not respect the audience he made the statement to at the TESCON conference in Cape Coast on Saturday August 7th.
Dr Bawumia noted that despite the increase in public debt, inflation and exchange rates have fallen due to careful management of the economy.
The NDC and their minority lawmakers had said the government’s borrowing level was too high.
For example, speaking at a post-budget 2021 workshop for MPs in Ho in the Volta region, minority leader Haruna Iddrisu said the government cannot blame COVID-19 for its bad management of the economy.
“The bottom line is that President Akufo-Addo has increased our stock of debt from GHS 120 billion to GHS 291 billion, which represents some 76% of debt to GDP.
“He has conveniently chosen to blame COVID-19 for the poor performance of the economy, and yet he is seeking to recover from COVID-19. “
But speaking at a TESCON conference, Dr Bawumai said, “I want to let you think of one thing; you hear the NDC say that the debt level has gone up. Of course, the debt level has gone up, but the economic levels have not gone down. The level of debt has increased yes, but why do we want to maintain a prudent level of debt?
“When you teach economics, you have to ask your students this question; why do we want debt levels to be kept at prudent levels? The reason is that if you don’t manage your debt level properly, it will affect your exchange rate, it will affect your interest rate, it will affect your inflation, and it will affect your growth.
“You manage the economy in such a way as to examine its impact on these variables; exchange rate, interest rate, inflation and growth rate. This is the problem.
“When the NDC was in government, long before, they took us to HIPC. They had mismanaged debt levels, so we had very high inflation, very high exchange rate depreciation, very high interest rates, and low growth. This is the legacy they left us.
He added: “As we approached 2016, debt levels had increased such that inflation was rising, interest rates were rising, the exchange rate depreciation was increasing and growth was also decreasing, and they had to report to the IMF. for a bailout. Wasn’t that the case? It was the economic management of the NDC.
“Our debt levels have increased, but what happened to inflation? He fell. What happened to the depreciation of the exchange rate? Depreciation has gone down. What happened to the interest rate? He fell. What happened to the growth? It’s rising.
“It’s a difference in economic management. There is one who is incompetent and there is one who is competent. If you choose the NDC, you are going down the path of incompetence, and if you choose the nuclear power plant, you have competent economic management.
Reacting to the vice president’s comments, Kwakye Ofosu said in a Facebook post on Sunday August 8 that “According to Mahamadu Bawumia, public debt of GHS 334 billion in 2021 representing 78.9% of the debt-to-GDP ratio which led to using 92% of tax revenue to pay interest and amortization on it alone, shows prudent borrowing but government debt of GHS 120 billion, with debt-to-GDP ratio of 56% leading to use 28% of revenue for the service in 2016 shows a non-prudent borrowing.
“He clearly had no respect for the audience he addressed yesterday.”
Source link
