A Senior Economist, Dr. Lord Mensah, is urging the Bank of Ghana to print money to help government’s fight against covid-19 due to the pressure on public purse.
In an interview with Accra based Citi FM, which was monitored by the Ghana Talks Business, Dr Mensah says whatever incentives that the Government may provide will require the BoG dipping into its coffers to make it happen.
“Whatever incentive we are going to provide or subsidiary the government intends to provide will boil down to the Central bank diving into its coffers, if there is not enough or contingencies that the country has”, he said.
Consequently, Dr Mensah suggest that “if we don’t have contingency, then in house, there is nothing wrong if we print money to satisfy the immediate needs of the country”.
While acknowledging that the printing of the money could largely depend on the production capacity of the BoG, the Economis explained, when done, the money could be used to solve it’s liquidity challenges.
“The reason why I am saying this is that Ghana was already struggling, liquidity wise. We were having serious problems with liquidity and you could see all the measures that we were putting in place, before the COVID-19 was to ensure that the banks are liquid and we never got there before COVID-19 came in.
“So, if you ask me that the Central Bank can print money for that purpose, it depends on the production capacity of the economy as well,” he added.
Measures to mitigate impact of Covid-19 on businesses
Following the outbreak of the coronavirus virus in the country, Government announced a number of measures to help lessen impact of the pandemic on businesses and individuals.
The interventions included a GH₵600 million stimulus packages for SMEs as soft loans.
A National COVID-19 Trust Fund was also established to raise money from organisations and private individual to help the fight.
So far Government has received GHS8,750,000 in donations.
Also, the Finance Committee of Parliament has given authorization to the Minister of Finance to spend GHS1.2 billion from the Contingency Fund.
Covid-19 to cost Ghana GHS9.5bn
The Finance Minister, Mr Ken Ofori-Atta, has disclosed that the Cocid-19 pandemic will cost Ghana GH₵9.505 billion.
According to him, the figure represents 2.5 percent of Ghana’s revised Gross Domestic Product.
“Speaker, the total estimated fiscal impact from the shortfall in petroleum receipts, shortfall import duties, the shortfall in other tax revenues, the cost of the preparedness plan, and the cost of Coronavirus Alleviation Programme is GH₵9,505 million,” he said when he appeared in Parliament.
He said there will be a “fiscal gap of GH₵11.4 billion”.
Additionally, he says, import duties will fall short of the target by GH₵808 million for the 2020 fiscal year.
Current situation in Ghana
Ghana has recorded 566 COVID-19 cases with 8 deaths and 17 recoveries, as at the last update, this morning, April 14, 2020.
Some part of the country is currently under lockdown.
Accra, Tema and Kumasi are under a two-week partial lockdown which started on Monday, March 30, but has been extended by one more week, effective 13 April, 2020.