Bawumia may know Economics but has no clue about Economy

When candidate Nana Addo Dankwa Akufo-Addo introduced Dr. Mahamudu Bawumia to Ghanaians as his running-mate with an enviable knowledge about economics, we failed to ask one question, which is “what was Dr. Bawumia’s knowledge about economy”? We assumed that, being a good economist automatically meant he could manage the economy better. There are differences between economics and economy.

Lionel Robins defined economics as “Arts and science which studies human behaviour, as a relationship between ends and scarce means which have alternative uses”.

On the other hand, economy is the process or system by which goods and services are produced, sold, and bought in a country or region, it relates to the state of a country or region in terms of the production and consumption of goods and services and the supply of money.

In simple terms, economics is the theoretical aspect whiles the economy is the practical aspect of it.

Today, the Ghanaian economy is in tatters because the Economic Management Team (EMT) is being headed by an economist who only knows the economics theories but has absolutely no idea about how to turn GHC10 to GHC20 as business men and traders are doing. Dr. Bawumia has never in his life managed a business of his own where he could have put the theories he learnt into practice. Ph.D. is about understanding theories in the field of study and preferring solutions to problems just on paper. No wonder most Ph.D. holders are confined to the lecture halls teaching and explaining theories whiles professional doctorate holders like Doctor of Business Administration (DBA) are in Board rooms of corporate organisations where results and impacts are other of the day.

During the NPP presidential primaries, Hon. Kennedy Agyapong questioned Dr. Bawumia's knowledge about the economy and gave an example of a tradr whom he believed knows the economy better than Dr. Bawumia. His comment were based on the recent unprecedented mess the economy has found itself with Dr. Bawumia as head of the EMT.

Having knowledge about economics is having a theoretical knowledge about how money, resources, and goods impact lives. It is knowledge that analyses individuals, businesses, and governments’ choices about production, consumption, and distribution. Economists uncover reasons behind economic behaviour and its consequences by studying supply and demand, prices, and policies. They seek answers to questions like unemployment causes inflation’s impact on prices and poverty alleviation. Their discoveries guide economic policies that aim to improve living standards and create a fairer society. Theoretical understanding of economics is essential as it influences various aspects of our lives. It provides valuable insights into personal finance, business decisions, and government actions. Economists usually provides theoretical framework for others to implement, but the process of linking theory to practice to impact lives is what is called economy.

The economy is like an intricate web connecting all aspects of money, resources, and goods and services. It encompasses three crucial elements: production, distribution, and consumption. Production involves creating goods and services like clothes, food, cars, and electronics. Distribution ensures these items reach stores or customers, making them available for purchase. Consumption is when people and businesses use these goods and services to meet their needs and desires.

Knowledge about economics does not automatically means one has the ability to shape an economy. Shaping and enhancing an economy entails programmes that help people get work and earn a living, then spend on various goods and services. This spending drives economic growth and allows businesses to expand, leading to more job opportunities for others. Saving, investing, and cleverly borrowing money are significant parts of the economy, managed by banks and financial institutions.

Understanding the economy is important than understanding only the theory i.e. economics, because it impacts everyone’s daily life. It affects the cost of goods and services, job availability, and the overall well-being of a country.

Not all economists can shape and enhance an economy, improving an economy is hinged on the ability to link theory to practice, experience and making impact. Dr. Bawumia has clearly demonstrated his bankruptcy in terms of linking theory to practice, he understands economics but has no idea about economy.