Longer Lockdown Not Possible in Ghana

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The Ghanaian economy been informal could not withstand more than three weeks partial lockdown. President Akufo-Addo on March 27th declared a partial lockdown as part measures to curb the spread of coronavirus in the country but, lifted it after 3-weeks.The Finance Minister said it was necessary to lift the lockdown

‘’When you look at what happened during the lockdown. It was quite clear after a point that given the 90% of our population is informal and they go out each day to earn wages, it became increasingly impossible to continue with such a policy,” he said.

The Coronavirus (COVID-19) pandemic has had a significant adverse impact on the global economy.

In Ghana, though government is implementing various fiscal and monetary measures to mitigate the adverse effect and provide relief for businesses and households, the outbreak has brought three years of economic growth of 6% or more to a sudden halt, with the Ministry of Finance expecting growth could slow to 1.5%, the lowest in 37 years.

President Akufo-Addo has stated that the effect of the COVID-19 pandemic could affect Ghana’s growth rate from 7 percent on average to 2.5 percent if the situation persists throughout the year.

The Finance Minister stated that Ghana will experience a significant decline in revenue targeted for 2020 due to the COVID-19 because the country is having a huge decline in revenue from the port, petroleum revenue receipts as well as tax revenue.

He, however, indicated that the cumulative effect of the novel coronavirus will cost Ghana GHS9.505 billion.

Meanwhile, Government has implemented some measures to mitigate the impact of COVID-19 on the economy.

These include the establishment of a Coronavirus Alleviation Programme (CAP) to promote economic recovery.

Lowering of the cap on Ghana Stabilization Fund (GSF) from the current US$300 million to US$100 million to allow for the transfer of excess funds to the CAP

Reduction in the policy rate by 150 basis points to 14%, drop in regulatory reserve requirement from 10% to 8%  to increase the supply of credit to the private sector and strengthen it.

Commercial banks are providing a syndicated facility of GHS3 billion to support key industries; to grant a six-month moratorium on principal repayments for selected businesses, and to reduce interest rates by 200 basis points, and  increase much needed  credit supply to the private sector

It has also has put in place a GHS600 million soft loan scheme with a two-year repayment plan for micro, small and medium scale businesses and taking care of water  bills of all Ghanaians from April- June 2020..

Electricity consumers, where not left out, all lifeline consumers will get a one hundred percent waiver for three months; while other consumers will get a fifty percent reduction.

Ghana corona virus cases presently is over 5000 with over 400 recoveries.

 

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