Gargantuan Lies Under the Cover of PhD – NDC New York Branch Chairman Exposes “Dr.” Bawumia Part I

At a press conference organized by the Vice-Presidential candidate of the NPP, “Dr.” Mahamudu Bawumia to compare the economies under NPP and NDC governments, ended up to be a show of academic dishonesty, unprofessional economic analysis, and brazen manipulation of statistics. I have been following “Dr.” Bawumia for some time now, and have come to realize that either he is a pathological liar or he does not know how to analyze economic data. I could not believe my eyes when I took my time to analyze his presentation. The only conclusion I could arrive at is, his motive was to throw dust into the eyes of Ghanaians, using his Vodoo economic analysis.

Please follow me as we journey through “Dr.’ Bawumia’s world of “voodoo” economics.

Below is an excerpt from “Dr,” Bawumia’s response to NDC’s “Changing Lives, Transforming Ghana” Budget from myjoyonline.

The NDC government’s economic performance is a “record of monumental waste of an historic opportunity to transform the economy”. He says comparisons between NPP economic track record and NDC’s is proof of his claims. He presented that in 2001 under NPP, GDP growth was 4.3%, in 2002, it was 4.5%, in 2003, it was 5.3%, in 2004 it was 5.7%, in 2005 it was 5.9%, in 2006 it was 6.6%, and in 2007 it was 8.4%. This is indeed steady growth and it occurred without revenue from oil, according to Bawumia.

He further stated that under the NPP, the total value of the economy grew from 5.1billion dollars to 28.5bn dollars, representing 500% growth even in the face of a global economic crisis in 2007. Ghana was transformed from a low income to a middle-income economy under NPP, According to “DR” Bawumia, under the NDC government, the economy grew by 7.4% in 2009, in 2012, it was 8.8%, 2014, further down to 4.1%, 2015 provisional figures put growth at 4.1%.

The truth: “Dr.” Bawumia accuses NDC of using propaganda to run the economy, but what he “Dr.” Bawumia is doing is lying his way to power, which in actual sense, he is far from attaining. The following are the real GDP growth rate from 2001 -2013 (Source: IMF World Bank Economic Outlook; database Oct. 2014). Have you observed any anomaly in the above presentation by Bawumia? Why is 2011 data missing from his presentation? That piece was not left out by mistake. It was deliberate omission, because in 2011, the GDP growth rate was a GARGANTUAN 15%. This was under which government? NDC. I find this amusing!

Real GDP growth under NPP and NDC (source: IMF, World Bank)

The disingenuous economist (“Dr” Bawumia) was of the view that the mediocre growth during NPP government compared to that of NDC occurred without revenue from oil. He forgot to mention that NPP government received a whopping sum $3.5 billion HIPC relief from donor agencies. One would have expected double digit growth rates in an era where majority of the country’s debts were forgiven. “Dr.” Bawumia should tell Ghanaian’s the reason why he omitted 2011 GDP growth rate from his presentation, why he failed to mention that despite the 3.5b HIPC money, the growth rates during NPP era were abysmal. Lastly, he ought to explain why he increased growth rates under NPP in his presentation? It is a shame! “Desperation bi this?”

Again, he lied that NPP performed better even in the face of the global recession in 2007.

The global recession started in December 2007. The effect of the recession on developing economies started in 2009, when NDC was in power. How come that a recession that started in December of 2007 impact Ghana’s economy that same year? That was what I call a bogus analysis. Ghana’s economy was not as sophisticated as developed economies to be immediately affected by the credit crunch. It’s obvious from the figures above that on average, NDC government performed much better than NPP. He should stop throwing dust into the eyes of Ghanaians.

Debt Stock
“Dr.” Bawumia, devoted more time to the debt stock of the country, throwing figures here and there instead of providing analysis of them. For example, he mentioned that 72% of the external debt stock was accumulated during last seven years. And that, interest payment is five times the budgetary allocations of Ministries of Roads, Trade and industry, and at least two more ministries.

“Dr.” Bawumia, and so what? Let us assume that your 72% and interest rate payments were correct. My question is what are you trying to tell Ghanaians as an economist?

I am not an economist, but, my professional experience tells me that one cannot analyze debt stock in isolation. Any kind of debt stock, either external or domestic is best analyzed in relation to the Gross National Income (GNI) of the country. Just like a business man who took a loan of $200 from a bank in 2014 and $400 in 2015, you cannot say that he increased his debt stock by 100% and stop there. As an economist or a business analyst, you would want to find out how much income has the debt generated. Therefore, the best debt stock performance indicator is debt as a percentage of Gross National Income (GNI) year over year. So, what I did was, I visited IMF, World Bank Economic Outlook Database October 2014, and I was amazed by what I saw. The figures were revealing. Ghana’s external debt stock as a percentage of Gross National Income (GNI) was much lower under NDC government than under NPP government. These figures tell you how efficiently or profitably the loans were deployed. See below the figures for yourself.

Ghana’s External Debt as a percentage of GNI (source: IMF, World Bank)

The lower the external debt stock as percentage of GNI, the better. Under NPP, you could see that the external debt stocks as a percentage of GNI was about 3 times the years under NDC. The information above is simple. It tells you how the loans taking by governments under various regimes had been used to generate income. “Dr.” Bawumia is aware of this information, but he was prepared to sacrifice the truth and his integrity for power which he is far from attaining.

Interest Payments on External Debt Stock
Again, according to “Dr.” Bawumia, interest payment is five times the budgetary allocations of Ministries of Road, Trade and Industry and at least two more ministries. So what? Let’s dig deeper; for instance the size of United States’ interest payment on external debts is greater than the GDP of Ghana and Nigeria combined. Do we then conclude that the economy of USA is being mismanaged? The answer is no. This can only be determined in relation to the Gross National Income of the country. The same concept applies to Ghana. I am not sure if it is international or due to lack of analytical acumen “Dr.” Bawumia decided to deceive Ghanaians by mentioning the size of the interest payment without considering the relative GNI. Below is the data obtained from IMF World Bank database for interest payments as a percentage of Gross National Income from the year 2002 – 2014.

Again, the reason why “Dr.” Bawumia would not mention the figures above is because under NPP, the interest payment on external debts as a percentage of GNI is much higher than performance under NDC, which is an indication of an appalling performance under NPP. I wonder why for many years, we have allowed this man to spread falsehood under the guise of his PhD without been challenged or checked.

From the analysis above, if Ghana were to a business entity, and my client sought my advice as to whether to acquire or invest in it, my response would be absolutely. Why? Yes because the managers of the country are doing a better job compared to the prior managers based on the analysis above.

GDP growth graph - World Bank website.
The above growth graphs speak volume. All other indicators point to a better performance under NDC compared to NPP.

This unprofessional behavior of Bawumia is not helping the country. Peddling falsehood about the economy has become his hallmark. Ghanaian’s are discerning people. It is important we expose those who hide under academic credentials to deceive unsuspecting Ghanaians. I believe voting is right best exercised by people who have educated themselves on the issues the country is facing.

Author:
Moses K. Mensah, CPA, MBA
PricewaterhouseCoopers, LLC
New York Office.