Prime News Ghana

Covid-19 could lead to shortage in food supply and general inflation of food prices

By Justice Kofi Bimpeh
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KPMG report on the economic impact and implications of the Covid-19 on Ghana has estimated that if the pandemic intensifies, it could lead to a shortage in food supply and general inflation of food prices.

Parts of the report that focused on Agriculture indicated that " the general agriculture sector is also expected to experience an adverse disruption in the supply chain coupled with lower demand activities.

Some parts of Ghana has been on lockdown for two weeks after the outbreak of Covid-19 in the country. This is to help stem the spread of the disease. Ghana case count currently is 636 with 17 recoveries and 8 deaths.

Government has also provided stimulus packages for the small business to be able to mitigate the impact of the pandemic.

There have been concerns from some farmers in the country of not being able to transport their produce to the urban centres which will negatively affect them.

READ ALSO : Uncooked food must be distributed to Ghanaians to help Covid-19 fight – Hospital Administrator

KPMG in its estimation based on their analyses said "uncertainty, fear and panic could also negatively impact the planting decisions of farmers.

The report also presented some positive forecasts for the agric sector. Enhanced local production is one of the areas they believe Ghana can take advantage of.

"Opportunities are provided for import substitution, thereby, enhancing local production of goods and services".

"Improve Agriculture production and export; opportunity to boost domestic production and consumption of some food commodities, such as rice, maize, cassava, yam and chicken and export of commodities for which Ghana has a comparative advantage in to trade within the West African Sub-region, among countries that have not closed their borders to cargo."

Gov't will access IMF's $1bn from April 18 - Ken Ofori Atta

Minister for Finance Ken Ofori Atta says the IMF's disbursement of $1 billion which is to be drawn under the Rapid Credit Facility (RCF) will be accessed from April 18, 2020.

According to Ken Ofori Atta, all paper works will be concluded this week and hopefully by the weekend government will begin to access the funds.

The Executive Board of the International Monetary Fund (IMF) on Monday approved the disbursement of $1 billion to be drawn under the Rapid Credit Facility (RCF).

Following the IMF Executive Board’s discussion of Ghana, Tao Zhang, Deputy Managing Director and Chair issued the following statement:

“The Covid-19 pandemic is impacting Ghana severely. Growth is projected to slow down, financial conditions have tightened, and the exchange rate is under pressure. The budget deficit is projected to widen this year given expected lower government revenues and higher spending needs related to the pandemic. The Fund’s emergency financial assistance under the Rapid Credit Facility will help address the country’s urgent financing needs, improve confidence, and catalyze support from other international partners.

“The authorities’ response has been timely, targeted, and proactive, focused on increasing health and social spending to support affected households and firms. The Central Bank has recently taken steps to ensure adequate liquidity, preserve financial stability, and mitigate the economic impact of the pandemic while allowing for exchange rate flexibility to preserve external buffers.

“The uncertain dynamics of the pandemic creates significant risks to the macroeconomic outlook. Ghana continues to be classified at high risk of debt distress. The authorities remain committed to policies consistent with strong growth, rapid poverty reduction, and macroeconomic stability over the medium-term.

“Additional support from other development partners will be required and critical to close the remaining external financing gap and ease budget constraints.”

Reacting to the disbursement in a radio interview, Ken Ofori Atta said the money from the IMF is an important intervention to help Ghana's Covid-19 fight.

"I think it was an important intervention and I think the timeliness of the IMF's response and the proactiveness in which they have work with us is quite outstanding because by realising the impact of the coronavirus on our economy and I did go to parliament to suggest that we are going to lose over a billion dollars in revenue due to oil and excesses both import taxes and domestic taxes which is fast diminishing, we are going to have a gap, over 1.3 billion dollars equivalent will be needed to ensure that we counter the slow and tightened financial conditions and pressure on our exchange rate..."

He further explained that "the beauty of this is that the rapid credit facility we went for is a zero percent facility, it's 10years and Five and half moratorium."

"We do all the paper works and possibly by the weekend we should have the Bank of Ghana issued in these funds," he added.