A former Deputy Governor of the Bank of Ghana (BoG), Dr. Mahamudu Bawumia, yesterday began his 2016 presidential campaign by once again painting a bleak picture of Ghana’s debt situation.
He said, Ghana was on a slippery slope to the shackles of debt un-sustainability, warning that unlike a decade ago, when the nation enjoyed debt relief under the Highly Indebted Poor Countries (HIPC) initiative, this time around “debt relief is not available.”
He was delivering a one-sided lecture on the value of the national currency, against major global currencies at the Central University College (CUC) organized under the CUC Distinguished Speaker series. No Government official was invited by the private university to rebut his claims.
His speech, was nothing different from his claims on the Cedi, Ghana’s debts situation and the economic indicators during the 2012 election campaigns, Vice-Presidential debates, rallies among others.
The causes of the depreciation in value of Ghana’s local currency, the cedi, against its major trading partners, Dr. Bawumia argued, could not be understood, without first understanding the economic fundamentals of the country.
According to him, the spiralling debt and the high interest payments on the debt, had a direct impact on the stability of the Cedi.
The 2012 NPP Vice-Presidential Candidate said, it was important to divorce the depreciation of the cedi from politics. Interestingly, however, he many times mentioned GYEEDA, SUBA, SADA and others which NPP elements have claimed have defined corruption in the John Mahama administration.
Touching on the debt stock, he said, the country’s 9.5 billion Ghana Cedis debt at 2008, had ballooned to 49.9 billion, representing an increase of over 40 billion in five years.
This debt, Dr. Bawumia said, represents 57.7 per cent of GDP.
“Our debt stock will be 60 per cent to GDP ratio by the end of this year,” he said.
He warned that “At this rate we are heading to debt un-sustainability and HIPC debt relief is not available.”
Dr. Bawumia likened Ghana’s situation to riding in a bone shaker vehicle on a rough road, without shock absorbers.
Government through the Deputy Minister for Information, Murtala Mohammed, has indicated that it was going to react to his politically-tainted false claims.
Meanwhile Nana Akufo-Addo yesterday also warned Ghana and Nigeria against their growing dependence on crude oil exports.
Addressing an audience of high profile corporate leaders in Lagos, Nigeria, Nana Akufo-Addo urged the leaders of Africa’s oil producing countries to not lose sight of the dangers that fracking poses to Africa’s future status as a pillar of global energy security.
Fracking, or hydraulic fracturing, has revolutionised the petroleum industry by allowing countries with the technology to access oil and gas resources from shale rock that were before impossible to reach.
In the last couple of years alone in the United States, it has significantly boosted domestic oil production and driven down gas prices. It is estimated to have offered gas security to the US and Canada for about 100 years, with the European Union, showing keen interest, led by the United Kingdom.
Akufo-Addo’s concern is for Africa’s oil-producing countries to draw up a structural economic transformation plan to meet the challenges that the fast-growing use of fracking in the developed countries is having on Africa’s primary-product dependent economies.
Akufo-Addo told his Lagos audience, “It might seem to you in Nigeria that with your oil you are operating in a larger world market already and do not need the region. It might seem to us in Ghana that with our newly discovered oil we can join the big league on our own. Maybe we should be keeping one eye on the news about the fracking and the real possibility that the dynamics of energy economics might be about to change dramatically. It is the responsibility of innovative leadership to think ahead and be ready for the changes that lie ahead.”
10 years ago, it was envisioned that Africa could account for 25% of all US crude oil imports by 2015, registering a ten-percentage point increase in the process. Already, in the last four years alone, the US had reduced its oil imports by a whopping 44%.
Fracking, according to Akufo-Addo, has added greater urgency to the need for Africa, which produces nearly 20% of global oil, to prioritise the process of diversifying its economies.
Giving the key note address at the annual Innovention Series organised by the leading marketing firm, Verdant Zeal, Nana Akufo-Addo stressed on the need for West African countries to work together under the Economic Community of West African States (ECOWAS) to transform their various economies.
“I suggest that Nigeria must provide that leadership. Nigeria must provide the political leadership and passion to translate the ECOWAS dream into reality. You have the numbers, you have the economic muscle and dare I say that you owe it to the region,” he stated.
He said the dream to integrate the economies of West African countries has not been realised because of lack of political leadership, urging the leaders of the various countries, particularly Nigeria, Ghana and Cote d’Ivoire to show greater commitment.
“Once the political will is evident, visionary leaders in Medicine, Science, Technology, Industry, Business, Law and all other professions can then work together to make ECOWAS a true regional market. Throughout the ages our traders and celebrated market women in particular have always managed to conduct trading activities throughout the region, but they have done so in spite of the difficulties put in their way by governments and officialdom,” he added.
The Nana Addo believes “Political leaders must encourage such visionary entrepreneurs to look first to our region and then to build transparent, competitive relationships that can and should accelerate our development.”
“The possibilities”, he said, “are endless. Just a small example: think with me for a moment about the prospects of Ghana selling $2 billion worth of salt to Nigeria and the ripple effects such a simple commodity, which Nigeria now imports from other continents can have on our economies.”
In a speech that received a standing ovation from the corporate gurus gathered at the Lagos Civic Centre, Nana Akufo-Addo urged West Africans to see it as their patriotic duty to think and act regional.
“When we think of West Africa and Africa before our own countries, we are not just being pan-Africanists, we are being true nationalists because what makes West Africa better will make each of our individual countries better and more prosperous.”
He was accompanied on the trip by business executives, and his aides, including Ellizabeth Ohene, Adwoa Safo, MP, Mustapha Hamid and Eugene Arhin.