![\"Dr.](\"http:\/\/4cd.e16.myftpupload.com\/wp-content\/uploads\/2016\/03\/DSC5937-1024x683.jpg\")
Dr. Mahamudu Bawumia, a former Deputy Governor of the Bank of Ghana, recalled the President\u2019s comments months ago when he claimed that 41% of Ghana\u2019s current external debt was accumulated under the NPP administration, a clear untruth.<\/p>\n
\u201cA few months ago, President Mahama stated in Ho that 41% of Ghana\u2019s external debt of $14 billion was accumulated by the NPP government between 2001 and 2008. This is clearly a falsehood. The truth is that, as a result of the HIPC initiative and prudent borrowing, Ghana\u2019s external debt stock actually declined from $6.1 billion in 2000 to $3.8 billion by 2008 (the first time in history). The debt has since increased by $10.2 to $14 billion in 2015. So how is what the President said in Ho possible? The facts therefore show that 72% of Ghana\u2019s external debt stock and 90% of Ghana\u2019s total debt stock was accumulated during the last seven years,\u201d he noted.<\/p>\n
Dr. Bawumia then touched on the President\u2019s comments on Monday on the unprecedented borrowing the government has undertaken in the last 7 years.<\/p>\n
\u201cThe President\u2019s false data on the debt situation suggests either unwillingness on his part to be honest with the Ghanaian people on the reckless borrowing and where it has landed us or the possibility that his economic advisors do not tell him the whole truth and thus, he does not appreciate the true scale of the mess.\u201d<\/p>\n
Secondly, President Mahama said on Monday that it was mathematically impossible for this NDC government to borrow $37 billion since Ghana\u2019s debt stock was $24 billion. Again, he is so very wrong. I have noted on many occasions that the actual value of the debt in dollar terms estimated at the dollar value of the debt at the time of borrowing is some $37 billion. This simple fact seems completely lost on President Mahama. What President Mahama needs to appreciate is that there is a big difference between the value of the debt in dollar terms at the time you borrowed the money and its book value several years later when currency depreciation is factored in.\u201d<\/p>\n
![\"_DSC6005\"](\"http:\/\/4cd.e16.myftpupload.com\/wp-content\/uploads\/2016\/03\/DSC6005-1024x683.jpg\")
<\/p>\n
Bawumia schools Mahama<\/strong><\/p>\n In proceeding to educate the President on the true value of the borrowing that has occurred under the NDC, Dr. Bawumia used a simple analogy to explain why the NDC has indeed taken an equivalent of 37billion in loans.<\/p>\n \u201cI will provide a simple example to explain this point. Assume that the exchange rate of the cedi to the dollar today is 1:1 (ie. One cedi equals one dollar). If the government of Ghana borrows GhC 100 today then the dollar equivalent of the additional debt stock would be $100. Therefore if the government wants to undertake projects with the loan, it can do $100 worth of projects.<\/p>\n \u201cAssume that four years down the road, the exchange rate depreciates to 4 cedis to one dollar. This will mean that the GHC 100 that was on the books will now be valued as $25 dollars. This will be the book value of the debt in dollar terms. Notwithstanding the impact of depreciation of the cedi on the dollar value of the debt, it does not mean that four years ago the government did not borrow the equivalent of $100,\u201d he indicated. \u201cIt is a clear demonstration of the fundamental lack of understanding of this concept that has led President Mahama into thinking that the book value of Ghana\u2019s debt at current exchange rates represents the actual dollar equivalent of the amount that was borrowed at the time of borrowing. One can forgive the President for not grasping this point but his economic advisors really should have no excuse. Using current exchange rates in determining the equivalent amount borrowed in the past is misleading because it would underestimate the value of the borrowing because of exchange rate depreciation.\u201d Government lacks understanding of simple issues<\/strong><\/p>\n Dr. Bawumia in concluding expressed sadness that such simple issues were not understood at the highest levels of government and queried how the government can manage such resources well when it does not even seem to appreciate the magnitude of what it has had.<\/p>\n \u201cA government that clearly does not understand the value of the borrowing it has undertaken cannot be expected to manage those resources prudently as we have witnessed in the case of this NDC government over the last 8 years. I feel so sad for Ghana because such basic and elementary matters are not even understood at the level of the Presidency.<\/p>\n “So Mr. President, as I have shown by the simple arithmetic, it is not mathematically impossible that your government actually borrowed a sum equivalent to some $37 billion even if the book value today is some $25 billion because of exchange rate depreciation. It only becomes mathematically impossible if you don\u2019t know how to do the math,\u201d he said.<\/p>\n Dr. Mahamudu Bawumia, Vice-Presidential Candidate to Nana Akufo-Addo, says President John Mahama needs proper briefing on the true state of borrowing that has occurred in the last 7 years. This comes as a direct response to recent comments from the President underestimating the extent of the NDC\u2019s borrowing and the fact that the actual value […]<\/p>\n","protected":false},"author":14,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"jnews_social_meta":[],"jnews_override_counter":[],"footnotes":""},"categories":[10,11],"tags":[],"class_list":["post-199188","post","type-post","status-publish","format-standard","hentry","category-slider-1","category-top-stories"],"_links":{"self":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/199188","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=199188"}],"version-history":[{"count":0,"href":"https:\/\/citifmonline.com\/index.php?rest_route=\/wp\/v2\/posts\/199188\/revisions"}],"wp:attachment":[{"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=199188"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=199188"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/citifmonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=199188"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nThe NPP Running Mate noted that while the President can be forgiven for his faulty data on the debt situation, it is mindboggling that his economic advisors also seem confused about the point.<\/p>\n![\"_DSC5905\"](\"http:\/\/4cd.e16.myftpupload.com\/wp-content\/uploads\/2016\/03\/DSC5905-1024x683.jpg\")
<\/p>\n
\n\u201cI repeat again that if you look at the dollar value of the debt accumulated by this NDC government at the time of borrowing, the total value is some $37 billon.\u201d<\/p>\n![\"_DSC5901\"](\"http:\/\/4cd.e16.myftpupload.com\/wp-content\/uploads\/2016\/03\/DSC5901-1024x683.jpg\")
\n–
\nBy: citifmonline.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":"