Covid-19 to Cost Ghana GHc 9.5Bn – Finance Minister

Ghana’s Finance Minister, Ken Ofori-Atta has says the novel coronavirus pandemic will cost the country GHS9.505 billion.

This will be 2.5 percent of Ghana’s revised GDP.

“Speaker, the total estimated fiscal impact from the shortfall in petroleum receipts, shortfall import duties, the shortfall in other tax revenues, the cost of the preparedness plan, and the cost of Coronavirus Alleviation Programme is GHȼ9,505 million,” he said when he appeared in Parliament today, Monday.

The minister indicated that Import duties, for example, will fall short of target by GHS808 million for the 2020 fiscal year.

Mr. Ofori-Atta said a preliminary analysis of the impact of the virus “on the real sector shows that the 2020 projected real GDP growth rate could decline from 8 percent to 2.6 percent with an outbreak and 1.5 percent with a partial lock-down.”

The Minister also explained that “the overall fiscal deficit will increase from the programmed GHȼ18.9 billion to GHȼ30.2 billion, which will be 7.8 percent of revised GDP.”

“The primary balance will correspondingly worsen from a surplus of GHȼ2,811 billion (0.7 percent of GDP) to a deficit of GHȼ5.6 billion (1.4 percent of GDP),” he added.

Mr. Ofori-Atta also announced that the GHS1 billion Coronavirus Alleviation Programme will be funded from the Ghana Stabilisation Fund.

The Minister is also seeking the support of Parliament to amend the relevant laws to lower the cap of the Stabilisation Fund from $300 million to $100 million to enable the government scoop the excess funds to bridge the gap created by the economic impact of the pandemic.

Mr. Ofori Atta said the equivalent of the $100 million announced by the President to help with Ghana’s handling of the virus is ready.
“I wish to assure that money has been secured and is available to be disbursed in accordance with public financial management procedure.”