Finance Minister updates Parliament on impact of coronavirus on economy

The Minister of Finance, Mr Ken Ofori-Atta, said preliminary analysis by the Ministry shows that the Coronavirus pandemic would impact negatively on the country’s petroleum receipts due to the collapse of international oil prices.

Additionally, the disease was likely to impact adversely on the nation’s custom and other receipts, increase expenditures on health as well as financing conditions on the fiscal front.

“More generally, it is affecting tourism, travel and conferences, Foreign Direct Investment (FDI), international trade, food and nutrition, and poverty reduction”.

Mr Ofori-Atta said this when he presented a statement in Parliament to update the House on the fiscal implications of the Coronavirus (COVID-19) and the measures being taken to pay depositors who had funds with the defunct Micro Finance Institutions (MFIs) and Savings and Loans Companies (SLCs).

Mr Ofori-Atta announced that government was putting in place measures to close a possible financing gap in the 2020 Budget that could result from the impact of the coronavirus.

He said the measures may include withdrawal from the Ghana Stabilization Fund occasioned by anticipated shortfalls in the Annual Budget Funding Amount (ABFA), adding: “We will come to this august House to seek for the necessary approvals in due course”.

Mr Ofori-Atta also announced that the Government was currently in discussion with the World Bank to tap into a US$12 billion World Bank Group fast track COVID-19 facility to help close the financing gap.

Additionally, government is discussing with the International Monetary Fund (IMF) to access part of a US$10 billion facility made available by the IMF to address Corona through the Rapid Credit Facility.

He noted the country was also discussing with other multilateral and bilateral partners on potential assistance to close the financing gap.

”But, Mr Speaker, even in the difficult global circumstances, Ghana is blessed” he said.

Mr Ofori-Atta also indicated that in December 2019, the President Nana Akufo-Addo directed that all depositors of the defunct SLCs and MFIs should be paid fully.

He said in line with the President’s directive, an amount of about five billion Ghana cedis was released in a combination of cash and a five-year amortized zero-coupon bond to the Receivers’ Paying-agent, the Consolidated Bank Ghana (CBG), to enable it to settle the remaining outstanding claims.



He explained that the amount required was provided by the Receiver of the failed SLCs and MFIs as the total amount needed to settle all outstanding claims.

Mr Ofori-Atta further explained that the government had released the cedi equivalent of US$184,822,412.43 in cash and issued a 5-year zero coupon bond with a value of four billion Ghana cedis in favour of the Receivers’ Paying-agent.

He said government’s five billion cedis had provided enough liquidity to enable the Receivers’ Paying-agent pay fully all depositors of the SDIs and MFIs in line with the President’s directive.

“All those affected will receive cash and a fixed deposit, which shall be credited to their account with CBG” he added.

Mr Ofori-Atta also noted that the fixed deposit with the CBG would be paid in 10 equal instalments over five years beginning March 2021.

This would be in addition to the cash component of up to GHc70,000 per retail depositor, which had already been made available to all depositors.

“In fact, up to 98 per cent of all depositors will be paid in full with the cash since most of the deposits are less than GHc70,000,” he added.