In the IMF Country Report No. 20/110 sighted by NewsGhana24.com, COVID-19 has been projected to have a Medium-Term effect on the Ghanaian Economy. COVID-19 has hit nearly every economy under the sun and has not spared Ghana’s economy which had been tagged as the best and most resilient by the government of the day. What is worrying to note is that COVID-19 has been projected to affect Ghana’s GDP and force it down the projected growth to a low of 1.5% by the end of 2020.
The report which gave an outlook and risks of COVID-19 on Ghana’s economy indicated that the increase in government deficit is expected to be temporary, as
most spending increase would be one-off (including for financial sector restructuring) and revenues should return to trend once growth rebounds next year, in line with a projected recovery in global growth and commodity prices.
- The State Of Ghanaian Farmers Amidst Covid-19 Pandemic Pathetic-Youth Rise International
- ‘You don’t run an economy from textbooks’ – John Mahama jabs Bawumia
The report further revealed that though Ghana’s DSA risk rating is currently at high risk of debt distress, debt service indicators are affected only marginally
According to the report, should the COVID-19 be extensive and prolong over a longer time, it would have severe human consequences which will further lead to a steep economic contraction in 2020. The 2020 contraction is expected to result in a rather slower recovery for the economy in 2020.
Food insecurity in Ghana is projected to rise resulting from disrupted trade and markets. The implication of this on the poor is that their current level of income will fall and poverty is expected to worsen.
A report on ‘Trends of Poverty and Inequality’ in Ghana based on 2017 population projections, projected that 6.8 million people captured were poor and could not afford to spend GH¢4.82 per day in 2016/17 (GH¢1,760.80 per year in 2016/17).
Ghana’s poverty rate for 2016 was 56.90%, a 3.6% decline from the 2012 figure according to macrotrends.net Ghana’s hunger statistics for 2016 was 6.10%, a 0.2% decline from 2015. However, the presence of COVID-19 is expected to worsen the plight of many Ghanaians and a glimpse of this was seen during the lockdown when it was difficult for many to survive the harsh realities of COVID-19
Ghana’s chief exports oil and cocoa prices could further decline with gold prices marginally increasing to shore off the loss of foreign exchange earnings of the country but to what extent can gold save the Ghanaian economy that is heavily an importing economy.
Ghana’s hopes of attracting foreign direct investments in the areas of industrialization drive of the 1D1F, oil, and gas industry may suffer serious setbacks. This rollover risks may be exacerbated by the higher financing needs in 2020, worsening investor confidence according to the report. The report revealed that Non-resident investors hold about one-quarter (25%) of domestic government debt. The slow down of global economic activities may lead to apathy given the COVID-19 effect on trade and investment.
According to the report, if the authorities do not implement their Energy Sector Reform Program. Financial sector cleanup costs may also increase, both because of existing risks—recapitalization of a troubled stateowned bank and fragilities in the non-bank sector—and potential new challenges, including an increase in non-performing loans due to the growth slowdown.
This is the time for the government to prove the statement of the president “Economic | “We know how to bring the economy back to life. What we do not know is how to bring people back to life” is not mere rhetorics.