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Cedi recuperates as Bawumia returns to Buckingham, his alma mater

Cedi recuperates as Bawumia returns to Buckingham, his alma mater

Some 32 years after graduating with first class honours in Economics from The University of Buckingham in the United Kingdom, Ghana’s Vice-President, Dr Mahamudu Bawumia, returns to his serene riverside alma mater on Friday for a two-day official visit that will see him deliver inspirational speeches to a global audience of present and graduating students.

“It is an honour to have such a distinguished alumnus and a respected Ghanaian for that matter come to address us during our graduation,” says Sarah-Jane Doku, a Ghanaian who is graduating from the University of Buckingham’s School of Law. “We see him not only as a top product of this school but also as a man of global significance. We can’t wait to celebrate him.”

Dr Bawumia is among a great list of graduates of the University, a not-for-profit institution of higher learning, who have gone on to reach national and global heights. He is, therefore, expected to use his speech to stimulate the grandaunts to dream big about the future ahead of them.

The impending official visit –– seen by some students and school officials as a recognition of Dr Bawumia’s leadership and academic achievements since leaving The University of Buckingham in 1987 –– is coming at a time the former deputy chief of Ghana’s Central Bank is facing increasing opposition pressure back home over the health of the Ghanaian economy.

As Vice-President, Dr Bawumia currently leads the Economic Management Team of the Akufo-Addo government which rode to power on the back of profuse criticism of the Mahama administration’s economic management skills.

According to new figures, Ghana’s national currency, the Cedi, has been performing poorly against significant trading currencies like the British Pound and the US Dollar since the beginning of this year, provoking fresh concerns the economy may be sliding into poor health.

In 2018, the cedi depreciated by 8.4 per cent against the dollar. Last week, the cedi’s weak performance against a strong US dollar peaked at around 5.5 GHc. The ensuing media firestorm forced Ghana’s Minister of Finance, Ken Ofori-Atta, to promise that hope was on the horizon.

“I am very confident that a reversal is going to occur and that [the Cedi] is going to be pretty stable going forward,” he told journalists in Ghana’s capital, Accra.  “We have about US$200 million coming in from COCOBOD and another US$600 million from COCOBOD in a month or so…and that should close within the next weeks or so…”

“With the type of capital that we expect in … weeks we expect a reversal and stability,” the Minister added.

In Buckingham, Dr Bawumia  ––  an alumnus of the School of Business  –– is scheduled to address graduating students from both the School of Humanities and School of Law on Friday and Saturday respectively. Although the exact details of what he will be telling his audience are unclear, there are speculations that economic events back home could force terse comments about how, as Chairman of Ghana’s Economic Management Team, he is working to cure the current problems, if any.

“As a distinguished former student of this respected University, it will not be out of place to have Dr Bawumia briefly tell us how he is using the great skills he learnt here at the University of Buckingham to confront the economic management issues in his country,” says a student who wished not to be named.

However, with his government preparing to hold what top officials are calling an “Economic Management Team Town Hall Meeting” next week, it is unlikely that the Vice President will use his speech in Buckingham to address the intense economic issues begging for answers back home, although reports that the Cedi is seeing a sharp revival from last week’s nerve-racking fall could prove a tempting story to tell potential future world leaders in his audience.

Kwasi Nyame-Baafi, who –– in repeating Dr. Bawumia’s academic feat in 1987 –– is graduating with first class honours in Economics from the University of Buckingham says, “The current policies being implemented by our Central Bank will help boost confidence in the financial system and help stabilise our cedi in the long run.”

He was, however quick to add, “The government has to focus on increasing our exports in the medium to long term to strengthen the Cedi. As a first-class student and a current doctoral student, I feel I would be of more help to my co-patriots in Ghana after the immense knowledge I have gained.”

Founded in 1973, The University of Buckingham continues to attract students from around the globe to its popular two-year degree programmes as well as its 10-month-long masters and 3-year long doctoral degree programmes.

Figures on the school’s official website show that at least eight per cent of the students are from “Sub Saharan Africa and the Indian Ocean.” They include countries like “Angola, Botswana, Burkina Faso, Cameroon, Djibouti, Gambia, Ghana, Guinea, Kenya, Maldives, Mauritius, Mozambique, Nigeria, Rwanda, Seychelles, Sierra Leone, South Africa, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.”

On the same website, a medical student, Tushar Hari is quoted saying, “The University has provided me with numerous opportunities.” He adds, “They’ve pushed me beyond what I thought I was capable of as a student”.

Gabby extols Cedi’s ‘record’ revival

Over the last few weeks, the Ghanaian Vice-President has been under intense pressure over the dwindling value of the country’s cedi after. On Wednesday, the Minority in Ghana’s parliament amplified the volume of its sustained criticism of the Akufo-Addo administration over the Ghanaian economy, which has seen a handful of local banks collapse following a banking sector reforms over the last few years.

On the same day, Gabby Asare Otchere-Darko, an outspoken Ghanaian lawyer and journalist trained in the UK took to his Facebook wall to describe the emerging storyline on the 62-year-old nation’s economy. “The Cedi had been struggling, inspiring a sweet reggae song as it slid into Minority bliss; with the central bank helpless as the bars under the IMF clock tick-tock to an end before April,” he wrote.

“Many were those who even doubted the success of Ghana’s 2019 Eurobond outing this week. But, the managers of the economy went on a roadshow and investors saw the full picture of the Ghanaian economy and were far from perturbed; they rushed for the $3bn on offer, throwing over $21 billion at us! Sorry, we could only catch 3!”

Mr Otchere-Darko went on with a bold claim: “Never in the history of sovereign bonds had an African country seen its bond oversubscribed 6 or 7 times. Not even negative reports on Ghana shook the renewed confidence. We also got it at the lowest rate ever for Ghana: 7.87% for a 7 year bond.”

With words suggesting he was celebrating the seeming recuperation of the Cedi, Mr Otchere-Darko added: “Now, let’s hope that the Cedi’s recovery we are seeing now will also set a new record because there is no legitimate underlining weakness supporting that speculative free fall since February.”

“Note that the cedi recovery started before Tuesday’s bond issue. Please also note that unlike previous falls, this time the BoG COULD NOT come to the rescue.”

The post, coming from a man known for his unquestionable loyalty to President Nana Akufo-Addo, appears to be a veiled jab directed at government critics who have been calling on the media to pile up relentless pressure on the government after signs that the Cedi was facing fresh troubles.

Dr Nii Moi Thompson slams ‘reckless’ spending 

A day earlier, Dr Nii Moi Thompson, an economist and former official of the former Mahama administration had said on Bernard Koku Avle’s ‘Point of View’ on Citi TV that the government should freeze public sector recruitments as part of solutions to revive struggling Cedi. “The role of government spending; excessive and reckless government spending is perhaps one of the most important of all the factors [affecting the cedi].”

Early Wednesday, the Minority Spokesperson on Finance, Ato Forson, launched fresh opposition tirade against the government and suggesting that the Ghanaian economy was in poor shape.

“The rapid decline in the value of the cedi has thrown the economy in disarray and the projections surrounding it as contained in 2019 budget,” Mr Forson said at what was dubbed a “stakeholder engagement” in Accra. “This has, therefore, undermined the confidence in the economy which is also sending wrong signals to the investor community. This calls for urgent steps to be taken by the government to restore the economy.”

Ato Forson’s five questions for Bawumia

In an open repeat of usual opposition demands during economic challenges under previous governments, Mr. Forsen, a former Deputy Finance Minister under the Mahama administration, added: “The starting point is that we should be considering a new budget which considers all the distortions and serious problems occasioned by the fall of the value of the cedi.”

He went on, “At the minimum, we expect a statement to Parliament assuring the nation on the steps taken by the government to address the instability of the economy. The budget as presented by the Minister of Finance can no longer be relied upon. It’s credibility and stability have completely been undermined by the cedi.”

Mr Forsen, a UK-trained accountant who is serving his third term in Ghana’s 275-member Parliament, also sought to somewhat reenact Dr Bawumia’s regular conduct during the heated political campaigns that birthed the Akufo-Addo Government’s election.

It is recalled that Dr Bawumia had fired a total of 170 questions at then Vice-President Kwesi Amissah Arthur in a repeated gesture that was aimed at exposing what he had called the Mahama administration’s lack of ideas as to finding a cure for the country’s economic malaise at the time. With the tables having been turned by the New Patriotic Party’s 2016 election victory, Minority MPs are returning the favour, with Mr Forsen leading the charge through the following questions:

“Question 1: Why would an independent central bank with focus on price stability decide to reduce the monetary policy rate against its own research findings that US policy normalization is strengthening the US dollar and causing investors to move funds away from emerging economies y and that upward adjustment in domestic prices of petroleum products are likely to affect transport and utility prices?

“Question 2: Why would an independent central bank, with a focus on price stability, decide to lower the policy rate in the face of dwindling net international reserves and a rising interest rate abroad?

“Question 3: Why would an independent central bank with a focus on price stability decide to reduce the monetary policy rate in favour of growth, which has been projected to be higher than the previous year’s, while the local currency is under pressure?

“Question 4: Why would an independent central bank with a focus on price stability decide to lower the policy rate in the face of excess liquidity in the banking sector emanating from banks increasing their minimum paid-up capital by over 100 per cent, while the local currency is fast depreciating?

“Question 5: Clearly, an economy cannot be externally unstable and internally stable. How can a rapid exchange rate depreciation be accompanied by a single digit inflation rate as captured by the posted macroeconomic indicators?”

While the opposition back in Ghana continues to pile up pressure on Dr Bawumia over the nation’s economic challenges, the story in Buckingham is one of a happy and satisfied global community of students, graduates, and school authorities waiting with bated breath to welcome back home and listen to a man they hold in such high regard.

By: Richard Sky

Source: citifmonline.com

Original Story on: Citi Newsroom
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