Vice President Dr. Mahamudu Bawumia came to Tamale last week and proudly proclaimed to all who will listen that the fundamentals of the Ghanaian economy were sound. He said the economy was in a much better shape than two years ago, a direct dig at the former NDC administration.
Dr. Bawumia then proceeded to rattle off a number of economic indicators —- low inflation, debt reduction, low interest rates and growth in the manufacturing and agricultural sectors —- to support his argument.
Despite the precipitous fall of the cedi in recent times, the vice president announced with a brave face that our currency was healthy. Clearly, the man was in a jubilant mood, what with the mounting criticism of the NPP’s administration inept handling of the economy.
It is a fact that millions of Ghanaians chafing under unbearable economic and financial conditions will without any prompting vehemently disagree with Bawunia’s jubilant assertion. They know very well that the economy is in a tailspin and they know that the vice president’s glowing praise of it is a total distortion of what is going on in their lives.
Dr. Bawumia’s baffling observation is yet another case of a politician touting the achievements of his government while deliberately misleading citizens who had reposed their trust in government to make their lives better by growing the economy. What a disconnect between the ruling class and the ruled.
Helping to make the vice president’s mood more excitable was a report from Standards and Poor’s, one of the three major credit rating agencies in the United States.
The S&P report which upgraded Ghana’s credit rating from a B minus to a B plus was immediately seized by NPP surrogates to point out that Dr. Bawumia was right on the money after all. The economy is doing just fine.
Hogwash I say. I don’t understand this irrational stampede by NPP diehards towards the S&P report. It does nothing but serve up a feel good assessment of an economy that has been in the doldrums for the past 18 months.
Anyone who has an inkling about the culpability of the agency in the global financial meltdown of 2008 will not touch the report with a ten foot pole.
Preceding the financial collapse, the agency had given the mortgage — housing industry in the United States a triple AAA rating which in turn encouraged banks to advance loans to borrowers with poor credit records and unstable finances.
Eventually, when borrowers could not pay the mortgage on their homes, the economy imploded and the shock wave was felt around the world. Millions in the U.S. and in rest of the world lost their jobs, their houses and their savings.
Standards and Poor’s and two other credit rating agencies were roundly condemned for the financial debacle. In 2011 a U.S. Senate Financial Crisis Inquiry Commission released a scathing report which said that the three credit rating agencies were key enablers of the financial meltdown.
Given Standard and Poor’s history of issuing false and dubious credit ratings to please its clients, the fundamental question is: why would our government place faith and trust in the agency and then go on to pronounce our economy sound? It is mystifying.
And, it would in my estimation, be wise and prudent, if the government puts its ear to the ground and listens to the suffering masses in Ghana instead of paying heed to a foreign credit rating agency that has a shady background.
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