Chief Executive of Dalex Finance, Ken Thompson is predicting a prolonged economic crisis in Ghana following the outbreak of the novel Coronavirus in the country.
To him, the four weeks ban on various public activities is a clear indication of tougher times ahead warning that the period may be extended to show the reality.
Many stakeholders have already expressed fears and called on the government to take the necessary steps to mitigate the impact of Coronavirus and ensure financial and economic stability.
Contributing to discussions on the impact of COVID-19 in Ghana on the Point of View, Mr. Thompson noted that:
“It [the ban] has to be more than four weeks. It is too short. We can’t do anything about it. This is happening because of things outside the country. So if the things happening outside the country haven’t changed, we can’t do anything about it. So [we] should prepare ourselves for the worse so we do not get disappointed. I don’t see how things are going to get better in four weeks time. If things have not changed in say US, how will it change in Ghana? We have to ensure that this thing does not come to our shores. Because if it happens, our systems are going to be under a lot of pressure. We shut down for four weeks, obviously, things will come to a halt. That’s the reality. And the four weeks is not possible so let’s prepare for a long haul.”
Already, the Finance Minister has noted that the government will rely on a mix of funds from the World Bank, the International Monetary Fund and withdrawals from the Stabilisation Fund to finance the budgetary gap expected to be created by the fiscal impact of the novel coronavirus pandemic.
This is needed because receipts from the petroleum industry, revenue from the tourism and aviation industries among others, have been projected to suffer a massive hit.
Stimulus package
Mr. Thompson among other things proposed a stimulus package that the government must institute to ensure that Ghana’s economic fortunes do not recede and bring relief to the citizenry during and after the COVID-19 outbreak.
He, however, did not rule out the possibility of the country returning to the International Monetary Fund ( IMF) for a bailout to shore up the economy and manage the impacts.
“We have to do whatever we need to do for this country not to collapse. We really need a stimulus package. But because a lot of our economy is informal, if we provide direct support the money will be spent. So for government, for instance, will say he is suspending PAYE and SSF and give it to the employee. It should scrap the CST and reduce fuel tax to make food and transport cheaper. We also need to find more liquidity to our micro-finance companies to help the vulnerable and then there must be rigorous monitoring of the economy to make sure we do not go into recession.”
“[We should go for money from IMF], because we do not have a choice. What choice do we have? So we may have to go for extra money from the IMF. I can see it coming because the government is always crashed and companies are grinding to a halt.”
Ghana well placed to minimize the economic impact of Coronavirus – Nana Addo
President Nana Akufo-Addo has said the government is taking steps to handle any adverse impacts the global outbreak of coronavirus could have on the country’s economic fortunes.
He was hopeful that Ghana will take advantage of the pandemic, position itself as a self-reliant country and bring to an end the assistance it receives from other foreign countries.
“Government is analyzing the potential impact on our economy to the virus and will trigger the relevant response to minimize it. We have begun to engage the domestic pharmaceutical industry to assist in producing as much of the logistics to prevent and combat the virus as it is possible under the circumstances. Indeed, we must take advantage of the crisis to strengthen our domestic productive capacity so that we can advance our self-reliance and reduce our dependence on foreign inputs.
Mahama gags government
Former President John Dramani Mahama had earlier criticized the government for failing to address the impact of the novel coronavirus pandemic on Ghana’s economy.
The NDC flagbearer accused the government of doing little to cushion Ghana from a plunge in economic activities as a result of COVID-19 adding that the government must release its plan on how to keep the economy afloat.
“What the government did not address is the wide-reaching economic impact of the pandemic. We have seen governments around the world make bold moves to protect the economies and we should expect the government of Ghana to respond rapidly to this challenge. I, therefore, call on the government to publish its plans to protect the economy including the possibility of a statement to Parliament on the expected impact on our economy of the destructions of COVID-19 on global supply chains and international travel.”
