The Minister of Finance has outlined the economic impact of the Covid-19 pandemic in Ghana. This includes a decline in GDP growth rate to 1.5%, negative impact on budget amounts due to shortfall from i. import duties, ii. non-oil tax revenues, iii. crude oil receipts from decline in crude prices; a decrease in foreign direct investments, significant job losses, high public debt burden etc.
In addition to the monetary policy reforms taken by Bank of Ghana, Government has put in place a Coronavirus Alleviation Program (CAP), as part of efforts to reduce the negative economic and social impact of the pandemic. Funding for the program will be from different sources including the Stabilization fund, Heritage Fund, World Bank, IMF, donor companies, individuals etc.
Legislative amendments will be required to the Public Financial Management Act, in order to access the Heritage Fund and the Bank of Ghana Act, to borrow above the stipulated threshold, for these emergency purposes.
The Finance Committee of Parliament, has in accordance with Article 177(1) of the 1992 Constitution, granted Government approval to withdraw GHS1.2 billion from the contingency fund to meet expenses for CAP.
Some of the social interventions proposed include a loan scheme for small, medium scale enterprises, moratorium on payment on water utility bills for three months from April to June, 2020, reduction in the cost of telecommunication data, various reliefs for health workers who are in the frontline of the pandemic, payments to the National Health Authority to improve liquidity, salary advance for some category of workers, deferment of tax payment for four to six months, contributions and donations to the Covid-19 fund to be an allowable expense for tax purposes and waiver of VAT on equipment and such donated goods. Penalties will be cancelled on tax arrears paid by end June.