Covid-19: Finance Minister briefs Parliament on Impact of Coronavirus on Ghana’s Economy

The Minister of Finance, Ken Ofori Atta, has told Parliament Ghana’s successful and timely raising of US$3 billion dollars from the Eurobond market in early February this year has been extremely and divinely helpful and provided the country with the needed buffer to anchor the Cedi.

The Finance Minister disclosed that the challenges posed by the coronavirus (COVID-19) pandemic will result in the increase in demand for dollars, a situation which, he noted, will impact negatively on Ghana’s foreign reserves.

These challenges notwithstanding, the Minister urged all Ghanaians to thrive and do all they could to conserve and preserve the country’s scarce foreign exchange reserves, in what he termed, these apocalyptic times.

Ken Ofori-Atta was in Parliament on Monday March 30, 2020 to brief Members on the impact of the coronavirus (COVID-19) on the Ghanaian economy and measures the government has adopted to sustain the economy following the disruption caused by the pandemic.

The Finance Minister declared that the slowdown in both the global and domestic economic activities is likely to result in debt service difficulties especially from the sectors that are hard hit such as aviation and hospitality.

He stated that preliminary analysis by the Ministry shows that the coronavirus pandemic would impact negatively on the country’s petroleum receipts due to the collapse of international oil prices.

The Minister further revealed that the disease was likely to impact adversely on the nation’s custom and other receipts, increase expenditures on health as well as financing conditions on the fiscal front.

He disclosed that the pandemic is already affecting tourism, travel and conferences, Foreign Direct Investment (FDI), international trade, food and nutrition, and poverty reduction.

Ken Ofori-Atta submitted that containment measures of the coronavirus (COVID-19) may lead to reduced productivity and job losses in the global market, including Ghana as a result of slowdown in economic activities.

He said the coronavirus pandemic has also negatively affected Capital Flight as a result of belated bearish emerging markets sentiments and given the high proportion of about 25% bonds spell by non-resident investors.

The Minister attributed this to the pursuit of tight conditions both in the global and domestic financial markets as a result of the COVID-19 pandemic which has so far affected 739,385 lives and caused 35, 019 death with 156, 588 people recovered.

Ken Ofori Atta informed the House that His Excellency the President Nana Addo Dankwa Akufo-Addo on Friday directed the Ministry to prepare a coronavirus alleviation programme to address the disruption in economic activities following the scourge of the pandemic for approval by parliament.
He said a request was consequently sent from the government to Parliament last Saturday to approve an agreement with the World Bank for an amount of $35 million to support its operations in dealing with the pandemic.

The Minister clarified that the proposed agreement is between the Government of Ghana and the International Development Association (IDA), a subsidiary of the World Bank.

He pledged to make a minimum of 1 billion cedis available to households and businesses, particularly small and medium scale enterprises upon prior approval of the House.

The Finance Minister said the World Health Organization has urged affected nations to observe social distancing measures including limiting large groups of people coming together, closing buildings and cancelling events in the wake of the coronavirus.

He admonished all Ghanaians irrespective of their social, political, economic, and religious or class status to observe this social distancing applied to certain actions that are taken by Public Health officials to stop or slow down the spread of this highly contagious disease.