Coronavirus and the Ghanaian Economy

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That corona virus had disrupted the global economy and is still impacting negatively on it, is no longer news.

However, the NPP led government of Ghana implemented some social welfare measures to curb the negative effect of the novel virus or pandemic.

The World Health Organization (WHO) had issued and is still providing guidelines to the world on measure to curb the spread. Almost all the nations have either followed the WHO directives or modelled their own directives to suit their various countries. These measures, although meant to save lives and reduce any negative social impact of the coronavirus pandemic, has had severe consequences on global economic activities.

Though various measures have been put in place, as of April 30th more than two million people were reported to have corona virus globally. Since then the numbers have shut up; recoveries have also increased while few cases of re-infection had occurred.

Since its outbreak in Wuhan-China in November 2019, the world economy has not remained the same. Several economic projections for the 2020 have been rendered virtually useless.

prior to the outbreak of the pandemic, global Gross Domestic Product (GDP) was projected to grow by some 3.3% in 2020.Experts, according to a Deliotte report are now forecasting  total world GDP growth will fall to about 2.9% growth rate this year.

Another yet to published Again, a yet to be published study has been conducted by a Ghanaian Chartered Economist, Dr. Ebenezer Ashley  to examine the impact of the COVID-19 on Ghana’s economy and on global economic activities and output. He estimated that global economic losses would be around US$2.7 trillion, ranging from 3.05% to 3.06% of projected global GDP of US$88.574 trillion or US$88.312 trillion for 2020.

Ghana

The corona virus impact on the economy is s projected to plummet from a target of 6.8% to about 2.6% in 2020 due to the ravaging impact of the coronavirus pandemic. Similarly, revenue for the country is also predicted to fall significantly in 2020

In April Ghana’s Finance Minister, Ken Ofori Atta, told the country’s parliament that government will lose revenue in the 2020 fiscal year to the tune of about US$1.9 billion. This is equivalent to 2.5 percent of the country’s GDP, as a result of Covid-19.

From a Deloitte publication, the estimated impact on the country’s tax revenue is pegged at GH₵808 million shortfalls in import duties and GH₵1,446 million loss in other non-oil tax revenue. The overall total deficit in non-oil tax revenue for the year is estimated at GH₵2,254 million.

Again, Mr Ofori-Atta, is reported in a recent Ghanaian publication to have mentioned that Ghana’s overall fiscal deficit is set at GH₵18.9billion (4.7% of GDP). This is expected to widen to as much as GH¢30.2 billion or 7.8% of GDP. Ghana is left to fill a fiscal gap of GH₵11.4bn or 2.5% of GDP.

in the said publication remarked that “the country’s primary balance would correspondingly worsen from a surplus of GH¢2.811bn (0.7% of GDP) to a deficit of GH¢5.6bn (-1.4% of GDP)”.

The following projections all portray economic doom for Ghana, urgent capital inflow is necessary to inject the informal sector that provides jobs for over 70% of the country.

Ethe Ovie

Ghnewz.com

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