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Financial analyst predicts slow pickup for the Ghanaian economy

By Justice Kofi Bimpeh
Market in Ghana
Market in Ghana

Financial Analyst Charles Mensah has predicted a slow pickup for the Ghanaian economy post-Covid-19.

According to him, most sectors of the economy will take some time to recover.

"Bouncing back will be slow, you don't expect the hotels to recover quickly so bouncing back will be very slow."

Expressing his views on the factors that will contribute to the slow recovery of the economy in an interview with Joy FM, Charles Mensah said the price of oil which forms the large part of our revenue projection has gone down.

"Now if you look at commodity market we are a new kid on the block in terms of oil but the prices of oil have just gone down and it is going to have a serious impact on our revenue if you look at our revenue projections of which large portion is coming from the oil sector and now the prices have gone down it is going to affect us."

He added that some commodities may help the recovery process but the said commodities like cocoa and gold will have issues with buying and consumption.

READ ALSO : COVID-19 has exposed the fragility in Ghana's economy - Ken Ofori-Atta

"We may have taken some room under cocoa and gold, the price has been stable but looks if you do the volumes who are going to buy and consume. For gold yes because people will use gold as a measure of store values of stability so people will probably go into the gold so but whether our mining companies are going underground to mine because of this pandemic. So volume-wise I'm not too sure we can even achieve those volumes that we expected..."

The economy will take three years to recover - Ken Ofori Atta

Finance for Minister Ken Ofori-Atta says the Ghanaian economy will take three years to recover from the impact of the Covid-19 pandemic.

The Minister in an article published in the Financial Times said “A U-shaped recovery is touted, but ours will likely be a steep drop, then a two- to three-year downward slide before a recovery; a trapezoid-shaped recovery!.”

According to him, debt aid by lenders such as the World Bank and International Monetary Fund (IMF) is imperative for any recovery programme.

The Finance Minister’s recovery timeframe follows a similar projection by Osei Kyei-Mensah-Bonsu, Majority Leader in Ghana’s 275-member legislature, that the impact of COVID-19 on the economy “will take about two years to address.”

Loss of domestic tax revenue and eroding of macroeconomic gains made over the past three years, following the worldwide spread of COVID-19, has left Ghana, as well as many African economies, in a precarious situation.