Impact of coronavirus on economy severe than other crisis – Terkper

A former Finance Minister under the erstwhile John Mahama administration has stated that the negative impact of COVID-19 on the Ghanaian economy is severer than the impact of the power crisis and the global financial crisis that had a direct impact on the economy.

Mr Terkper’s comment comes after the Finance Minister, Ken Ofori-Atta, on Thursday, presented a report to Parliament over the government’s plan to trigger section 30 (6) of the Bank of Ghana Act.

This is to help the government obtain GHC10 billion in domestic financing from the Central Bank to deal with the economic challenges occasioned by the coronavirus pandemic.

Addressing the House after tabling the report in Parliament, Ken Ofori-Atta indicated that the Central Bank has already advanced GHC5.5 billion to the government this month to meet its financial obligations.

“Given the exceptional circumstances and the challenges, the Minister of Finance, the Governor of the Bank of Ghana and the Controller and Accountant General, as required under Section 30 of the Bank of Ghana (Act 612) as amended, have agreed to trigger the emergency financing provided under the law which permits increasing the limit on the purchase of Government securities by Bank of Ghana in the event of any emergency to help finance the residual expenditures,” the Minister said.

This development has been met with resistance from the Minority caucus in Parliament who suspect the move is a ploy by the government to secure funds for the December polls.

Speaking on Morning Starr Friday, the former Finance Minister said there is no doubt that the COVID-19 pandemic has severely affected Ghana’s economy and it will be hypocritical for anyone to reject measures to stabilise the economy.

“COVID has an effect on the economy and we all know that and it is severer than other shocks than the global financial crisis, even the two and half years we were not getting gas from Nigeria which led to the power crisis which we call 'dumsor'.

“It is also anticipated to be severer than the 2014 drop in crude oil prices when we used 99 dollars and ended up with 35 dollars at a point, so it will be hypocritical to be against measures to stabilise the economy due to COVID which is severer because you had a lockdown because you have borders closed and export not going out, businesses particularly the hospitality industry shutting.”

But Mr Terkper added that the gap created by the pandemic has already been covered and wonders exactly what the government is going to use the GHC10 billion it is seeking the Bank of Ghana for.