The Worldwide Financial Fund (IMF) says Ghana has been in a position to handle the COVID-19 pandemic successfully.
An IMF mission led by Carlo Sdralevich which held consultations underneath Article IV from 28 April 28 to 12 Might 2021 by means of digital conferences concluded that “Ghana has managed very successfully the COVID-19 outbreak within the nation, and thus succeeded in defending lives. Virtually 93,000 instances have been confirmed, and sadly, 780 folks have died as of at this time. The launch of mass vaccine rollout has been a breakthrough, with the administration of roughly 1,000,000 doses as of the tip of Might.”
The staff had collaborative and constructive discussions with Vice President Bawumia, Finance Minister Ken Ofori-Atta, Dr Ernest Addison, Governor of the Financial institution of Ghana (BoG), different senior authorities officers, the finance committee of Parliament, non-public sector representatives and the civil society organisations (CSOs).
“Obaatanpa” CARES programme
In a press release, the IMF staff stated, “The impression of the pandemic on the financial system has been extreme. Actual GDP progress slowed to 0.4% in 2020 from 6.5% in 2019, because of decrease exercise within the extractive industries and a collapse in hospitality and retail providers, together with the casual sector that particularly employs feminine staff. Inflation spiked to double-digit due to meals worth pressures, earlier than falling to eight.5% in April 2021.
“Coverage interventions in 2020 have been additionally essential to safeguard livelihoods and paved the way in which for a quicker rebound of financial exercise. Actual GDP progress is projected at 4.8% in 2021, pushed by a rebound in mining and providers. Inflation is anticipated to stay across the central financial institution’s goal of 8% by the tip of 2021. The CARES programme has the potential to be transformative and inclusive for the Ghanaian financial system, buttressed by its emphasis on SMEs and digitalisation in addition to leveraging the AfCFTA.
“Authorities interventions in 2020 additionally exacerbated pre-existing fiscal rigidities and public debt vulnerabilities. The federal government deficit, together with power and monetary sector prices, reached 15.5% of GDP, whereas annual gross financing wants exceeded 20% of GDP. Public debt rose to 78% of GDP in 2020, from 64.4% in 2019, together with ESLA of GHC7.63 billion in 2020,” the assertion stated.
The staff additionally concluded that “The 2021 price range’s latest coverage pivot in the direction of fiscal consolidation is a vital step in the precise course and a troublesome one in a pandemic. Fiscal consolidation ought to be deepened and anchored round debt and debt service discount to create area for social, well being, and improvement spending.”
In line with the staff, “Given the social and fairness implications, fiscal consolidation ought to rely extra on progressive income and spending measures, whereas guaranteeing fiscal help to probably the most weak and social security nets.
“Regardless of progress in rationalising energy technology, the monetary viability of the power sector impacts folks’s day by day life and can stay a drag on productiveness and a driver of public debt if not addressed decisively. Bettering effectivity and collections stays a precedence to attain substantial financial savings.”
The staff stated the deliberate audits of COVID-19 emergency spending and of arrears gathered in 2020—along with routine budgetary reporting practices “are welcome as they may assist account for the rise of spending and its effectiveness, and supply classes to enhance the robustness of public monetary administration techniques.”