The First Deputy Governor of the Bank of Ghana, Dr Maxwell Opoku-Afari, has said measures put in place by Government to mitigate the adverse effects of the Covid-19 pandemic on the economy, has cost the country 4 per cent of its Gross Domestic Product (GDP).
The Deputy Governor made the disclosure during a speech at the launch of the Ghana CARES Guarantee Scheme aimed at supporting businesses affected by the global pandemic.
In monetary terms, the 4 per cent translates into a little over Ghs 15.6 billion ($2.7 billion).
“In our estimation, measures extended by Government so far is around 4 percent of GDP,” he stated, citing both monetary and fiscal policies implemented by the Central Bank and Finance Ministry in the wake of the pandemic.
The measures as he pointed out in his speech include:
The lowering the cash reserve ratio by 2 percentage points to free about Ghs 2 billion for banks and SDIs to lend to critical sectors of the economy; the lowering the Capital Conservation Buffer by 1.5 percentage points, which translate into about Ghs 1.1 billion for banks to boost lending; the triggering of a Ghs 10 billion GOG asset purchasing programme to support the budget. Adjusting loan provisioning requirements to free additional amounts of about Ghs 115.3 million in capital relief to banks.
As well as the introduction of the Coronavirus Alleviation Programme to protect households and livelihoods, support micro, small, and medium-sized businesses, minimise job losses and source additional funding for promotion of industries to shore up and expand industrial output for domestic consumption and exports. Absorption of utility bills of all Ghanaians from April to June 2020, the Ghs 600 million NBSSI soft loan scheme, 50 per cent additional basic salary and Ghs 350,000 insurance package for health workers among others.
Speaking further, he noted that despite the modest achievements of Government in handling the adverse effects of the pandemic as well as the positive outlook for the remaining quarter of the year, general performance of the economy remained below pre-Covid levels with some overhead fiscal risks.
Meanwhile, despite being hit hard by the pandemic, Ghana has been projected by the IMF and Fitch Solutions to experience growth rate of 0.9 per cent and 1.3 per cent of GDP respectively, for the remaining quarter of 2020, making Ghana an outperformer on the continent.
The growth rate as explained by the IMF and Fitch Solutions comes on the back of expected significant increment in economic activities.
