Finance Minister, Ken Ofori-Atta
The government of Ghana has agreed with investors to postpone interest payment on non-marketable domestic bonds held by public institutions to fund the financial sector clean-up for about GH¢1.2 billion (US$207 million), approximately 0.3% of Gross Domestic Product.
According to Fitch Solutions, the government of Ghana plans cutting spending on goods and services, transfers, and capital investments this year.
This also reflects the lower absorption capacity of the economy due to the COVID-19 pandemic, for a total of at least GH¢1.1 billion (US$189 million), 0.3% of GDP.
"To reduce the financing needs, the government will also draw US$218 million from the Stabilisation Fund and will borrow up to GHS10 billion (USS1.7 billion) from the Bank of Ghana. As a result of all these fiscal policies in place, we anticipate GDP growth to shrink in 2020", Fitch Solutions forecast.
Healthcare spending
Fitch emphasized that the government of Ghana has increased healthcare spending in order to address the coronavirus pandemic.
The government committed US$100 million to support preparedness and response, and about US$210 million under its Coronavirus Alleviation Programme to the promotion of selected industries including the pharmaceutical sector supplying COVID-19 drugs and equipment.
Additional funds have also been reserved to address the availability of test kits, pharmaceuticals, equipment, and bed capacity.
On April 26, a major investment in healthcare infrastructure was announced, including the construction or upgrade of 100 district and regional hospitals.
Fitch said an increase in healthcare spending will equate to more testing kits, pharmaceuticals, equipment and bed capacity available to tackle the Covid-19 pandemic.
