COVID 19, which is a member or a strain of the coronavirus family, has changed how things are done in the world by reshaping relationships in many countries; be it the economically rich and all powerful, militarily, or indeed poor or developing.

This virus has also proven to be no respecter of persons, be they rich or poor – or even the homeless. In the world today, travel restrictions and lockdowns have been at the top of protocols adopted by authorities. It is a phenomenon that has brought many mighty businesses, including the world’s large multinationals, to their knees – as economies and financial markets wobble.

In my little Republic of Ghana, we are experiencing a partial lockdown with restrictions on movements in two major cities – Greater Accra and Greater Kumasi – which include major metropolitan areas such as Tema, Kasoa and its environs. So far, we have recorded 152 cases, 5 deaths and 31 recoveries we are told.

With our greatest enemy being fear, what do I want to really talk about in this article? Well, it is how you and I have been affected economically by this stubborn virus; and how it is succeeding in bringing businesses to a standstill; shutting economies by closing factories and retail businesses; crushing financial markets; and, even today March 31, tumbling and flattening crude oil prices to all-time lows.  Historically, we are seeing WTI crude oil sell at US$20 per barrel; and Brent Crude also hit US$23 per barrel. Gold and Cocoa, which are our lead and primary commodities that bring Ghana foreign exchange, also initially suffered hits but have resurged strongly.

Government Measures 

Before I tackle the economic issues, as the Finance Minister told parliament, let me share a thought on our fight so far against this deadly COVID-19. Even as Ghanaians join other countries in resorting to isolation in voluntary or compulsory quarantine to protect themselves from the pandemic, opportunities for collaboration abound to defeat the disease. It has to be all hands on deck.

Also, I think there are lessons to learn from the experiences of other countries in dealing with not just coronavirus but also previous crises, such as the Ebola and SARS outbreaks, which came close to us.

Since November 2019, we sat and watched China struggle alone with what seemed to be its own problem with the coronavirus which was killing its people in Wuhan. Even in December 2019 and January 2020, when it became clear that the virus was real and travelling around the globe, like many other countries including South Africa, the Ghana government and all of us ignored it.  Yet as it continued to get intense in Wuhan for a longer time, we kept thinking it was China’s problem. Like any other virus, it moved far and wide through January and February; and when other countries were recording cases, as usual, we were not prepared. Reality hit us on March 12 when we recorded our first two cases.

But all the same, we woke-up from our slumber and have somewhat done well in going for the all-of-government approach that has helped countries such as China, Singapore and United Arab Emirates (UAE) to contain the virus.

I think our government led by President Nana Addo Dankwa Akufo-Addo is trying, and I agree with most of the measures taken so far. But I honestly think when he announced the restrictions, it should have taken immediate effect on that day. Giving 48-hours allowance is what has seen people run from the cities of Accra, Kumasi, Tema and Kasoa and its environs to other parts of the country – I am considering the relative chaos in India, Kenya and South Africa. We hope and pray those people are not carriers and do not spread it in other parts of the country. We must get them to go to testing centres that government should soon set up, if they see symptoms.

Economic Impact

Now, let’s look at the stimulus package government is putting in place and how this can help revive or sustain the economy, which is sick or in the emergency ward. To borrow a quote from the former Finance Minister Seth Terkper, “Austerity is an inherent part of fiscal management; you either prepare for it with your own fiscal discipline, buffers and stabilisers, or it will be forced on you by your benefactors”.

This simply means that considering economic ups and downs, at least I as remember from 2008 financial meltdown, Ebola coupled with the 2014 to 2016 commodities crash and subsequent financial crises again – before the 2020 COVID-19 outbreak – economic or fiscal managers need counter-cyclical measures when putting together their plans every year. This means they must look at all possible scenarios in putting together fiscal plans or budgets. This, I dare say, we forget to do in good times – and it comes back to bite us, hard!

Since we don’t have the full details of the Corona Alleviation Programme (CAP) from the Finance Minister, I will not spend a lot of time looking at the likely impact on us; but I would say the statement in parliament yesterday gives us some hope…though very little. At least it’s an indication of how government is thinking and how it wants to save this economy from going down completely.

“Here, let me be quick to say if care is not taken we may be heading to the IMF again for a new substantive programme – which is likely within context of the calls for debt-forgiveness for nations like Ghana, taking account the damage COVID-19 has done.”

Finance Minister Ken Ofori-Atta in parliament said the virus affects every fibre or fabric of the economy in Ghana, be it positive or negative; but I dare say that the negative is more than the positive.

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Shortfalls in petroleum revenues or crude oil receipts amount to some GHȼ5,679million. This, he said, means the corresponding projected revenue shortfall in Annual Budget Funding Amount (ABFA) is GHȼ3,526million; and the Ghana Stabilisation Fund and Ghana Heritage Fund are GHȼ1,058million and GHȼ453million short, respectively.

I am sure you are asking yourself the question: “Besides COVID-19 emergencies, what happens to the Free SHS?” This query is because we are using more than 70% of the ABFA to fund Free SHS. Indeed, the government is in hard times and needs help.

Non-oil revenues have also taken a hit amounting to GHȼ1,446million, bringing the total estimated shortfall in non-oil tax revenues to GHȼ2,254million.

“Even though events in the coronavirus pandemic are still unfolding, a preliminary analysis of the impact this menace on the real sector shows that the 2020 projected real GDP growth rate could decline from 6.8% to 2.6% with an outbreak and 1.5% with a partial lock-down. Mr. Speaker, the projected growth will further worsen in the event of full lock-down,” the Finance Minister said.

These disclosures and the measures announced, I think, are good for us. Especially when the private sector has also launched a Fund, apart from the 1 billion cedis fund set up by the president.

Dangerous Measures

Let me now go straight to the three measures proposed by the minister, which I think are dangerous for us.  I think we must be careful not to grant these to him and the government.

  1. Reduce the proportion of Net Carried and Participating Interest due GNPC from 30% to 15%;
  2. Amend the PRMA to allow a withdrawal from the Ghana Heritage Fund and undertake emergency expenditures in periods of national emergency. There is an estimated US$591.1million in the Ghana Heritage Fund;
  3. Amend the Bank of Ghana Act to allow government borrowing from BoG up to 10% of previous year’s tax revenue in the event of tight domestic financing market conditions.

I may not be an economist, but my simple economics knowledge which gave me a Diploma in Economics for Business from the Institute of Commercial Management in the UK, allows me to comment on them as dangerous – and which will hit us in our faces very hard. Why do I say so?

I first have to say that I agree government needs money; but for a government that has already taken loans to parliament for approval to build roads and other infrastructure which are hit by this pandemic, heath investments become a priority. I If you are looking for funds, you can and should get approval to divert these funds into building a robust health system and saving lives. It must not be business as usual and election-winning, which I think is still in the minds of the Executive.

Mr. President and Finance Minister, I beg you, think of it and rather fall on these funds or loans to deal with the situation; for there are lives to be saved, and roads or building infrastructure cannot be used by dead bodies or a sick population.

We are told of lowering the cap on the Ghana Stabilisation Fund (GSF) from the current US$300million to US$100million, which means we would immediately have US$200million at hand;  also the World Bank and the IMF are giving us funds or loans and grants, which are in excess of about US$600million. These exclude the loans we are contracting, including funds from the US$3billion Sovereign Bond that I have already mentioned. This means we have at our disposal enough funds to put to work in our fight against COVID-19.

My question, Mr. Finance Minister, is why do you want to touch the GNPC, Heritage Fund and go borrow from the Bank of Ghana without any mention of these loans accruing to government?

I have heard the various arguments on the Heritage Fund draw down, which are all valid; but now, for you who is reading this, let me tell you what is awaiting us if Parliament approves this amendment.

My simple point here is that granting these amendments the Finance Minister is seeking, would open the floodgates for them to dip their hands into the funds with any kind of excuse in an election year, as we are in.  An incumbent wants to win at all costs – and will do anything to do so. So, if they have to draw on these funds to do projects that will win them an election, why not?

Cedi Performance

But most importantly, the estimated US$591.1million in the Ghana Heritage Fund is hard currency and has been added to our forex reserves by government.  This is an unusual action by this government, and means funds being recalled can also see an impact on performance of the reserves and local currency.

Today, March 31, the dollar to the cedi rate is around 5 cedis 80 pesewas. We are told even our bonds are performing badly on the markets, which are all impacting on the cedi’s performance.

I say we must be careful not to dip our hands in there, I mean the Heritage Fund.

Borrowing from the Bank of Ghana

Already, government has spent some US$8.97million on printing the new 100 and 200 cedi notes which were introduced in November 2019. This is made up of US$4.45million and US$4.53million for the GH¢100 and GH¢200 notes respectively. The Finance Minister told Parliament recently that “an amount of US$5.39million of the total contract has been paid”.

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The Bank of Ghana’s plan with the new notes was to address the deadweight burden on the economy from past inflation and cedi depreciation, and it also said the structure of the denomination has changed – resulting in a shift in demand for higher denominations.

They went ahead to argue against some of us who pointed out to them it was not necessary at the time, and that it was going to fuel deprecation. Today the cedi to dollar rate is around 5 cedis 80 pesewas.

Despite the challenges with gas shortage, power crisis, and fall in crude and other commodity prices, Former Finance Minister Seth Terkper’s government from 2013 – after going into the 3 year ECF programme with the IMF – tried hard and met a conditionality that was zero-percent borrowing from the Bank of Ghana and put it in Banking Act. We also know that there are senior members of the current government who were in key positions at the IMF during this period.

We know that the Mahama administrations managed without BoG financing and built a lot of infrastructure while achieving fiscal performances that are now acknowledged to be credible. Why do we want to open the floodgates again for this government when in 2015 – with all the crises – it was not allowed?

I ask Parliament not to agree to this request, even though is the last result the Finance Minister is looking for. Being disciplined is critical even in these hard times. When that is done, the BoG will be forced to engineer the production or cut more cedis to be pumped into the economy – which will fuel inflation and also again spark depreciation of a currency that is already struggling.

Investments in the Oil & Gas sector

Again, government’s move to lower GNPC’s share of returns made on the Oil & Gas sector, mostly from the oil-fields, to 15% from the 30% it gives them is dangerous. Already, crude oil prices have fallen to an all-time low, which has eroded about or more than 70% of expected revenues from the sector. Why would government want to further reduce the GNPC’s share by 50%?

What this means is that GNPC, as a shareholder in production and exploring the fields, will not be able to do any further investments in the upstream production and exploration bids that are coming up. Whatever shares GNPC holds for and on behalf of us, they are sometimes expected to make contributions for the development or repair of the oil-fields.

At least, today we know some oil exploration companies have decided to leave Ghana due to the difficult times. I say government must not go there at all and end up starving GNPC of funds, as it may be left with trying to live hand-to-mouth.

In fact, oil prices – we are told – could turn negative as the world runs out of storage; as Saudi Arabia and Russia keep on fighting, and as collapsing demand and huge oversupply mean producers may soon need to pay to get rid of their own oil in stock.

In landlocked regions where maintaining an oil-well no longer makes financial sense, producers could be forced to pay just to get rid of their oil, according to analysts at Goldman Sachs. This would be cheaper than shutting down wells, they add. This means we must be very careful at this time. Savings and investments must be part of the plan.


Trust me, by the time this whole virus iddue kisses us goodbye to restart the economy again, I can tell you for sure that some businesses will send workers home; and those to be hit are contract or, as we say, casual workers. Some SMEs will not be able to come back, but new business will emerge. I just hope details of the stimulus package or the Coronavirus Alleviation Programme CAP will answer the questions on your mind and mine.

This is because to defer payment of taxes and statutory payments means, yes, you have freed some funds for the businesses that are running – but it will be sitting there waiting for them to pay in future.

Elsewhere, we’re told of government support that is enough cushioning for business, which will see business continuity and a return to normal after all this is over.

Because government is already challenged, we cannot give out the austerity or stimulus measures that other countries have – leading to some governments even taking up salaries of workers for three months.

We must understand that even with an economic stimulus package to reduce the burden on individuals and businesses such as the president’s directive on reducing data/telecoms fees, adding electricity and water fees would be a welcome boost. Also, fiscal measures to ease the burden on banks and enable lending and liquidity would also come in handy.

But whatever details of the stimulus which will be presented to parliament, it is important that those reading this article ensure we are not only healthy after we overcome this virus, but also will have a job to go to and have the economy bounce back.

I rest my case.

The views are the personal views of Norvan Acquah-Hayford, not those if this media outlet. To reach me to also express your view, which might be different from what I have espoused here, contact me via

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