Finance Minister Ken Ofori-Atta has revealed that the coronavirus pandemic will cost Ghana as much as GHS9,505 billion.
This will be 2.5 percent of Ghana’s revised GDP.
The Minister who briefed Parliament today on the state of the country's finances in these trying times said “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 GHS9,505 billion,”
Ultimately, there will be a “fiscal gap of GHS11.4 billion,” the Minister added.
Import duties, for example, will fall short of target by GHS808 million for the 2020 fiscal year, the minister indicated.
Mr Ofori-Atta however he $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.”
He clearly made it known that the pandemic will have an effect on Ghana's economy.
“Government has not stopped spending in the fight against the Coronavirus even though the Coronavirus pandemic will result in significant shortfalls in some areas.".
He added that there’s been an increase in demand for dollars which could impact negatively on foreign reserves.
“However, the increase in demand for gold will likely impact positively on the balance for payments on the Ghanaian economy. We’re observing reduced imports which has a favourable impact on volatility which has an impact on production in Ghana,” he explained.
The effect of the virus on the economy will worsen because Ghana just began a two-week partial lockdown of Accra, Tema, Kumasi and Kasoa.
The pandemic will also take a toll on Ghana’s GDP growth.
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.