The world is currently witnessing the tremendous magnitude and speed of collapse in economic activity and social degeneration like never before in our lifetime due to the novel coronavirus (COVID-19) pandemic.
This is indeed impacting negatively on efforts towards achieving the global Sustainable Development Goals (SDGs), which Ghana has adopted as its minimum set of national socio-economic policy goals to achieve by 2030. Indeed the country must achieve these goals in order to give meaning to the government’s commitment to eradicate poverty and leave no one behind by 2030.
The COVID-19 crisis has led the global economy to a new conundrum. Global financial markets have witnessed heavy losses and intense volatility. Trade and investments have similarly experienced sharp decelerations. Apart from the tragic human consequences of the COVID-19 pandemic, the accompanying economic uncertainty, according to the UNCTAD, is estimated to cost the global economy $1 trillion in 2020. This could rise to $2 trillion should growth in the world economy slump to only 0.5%. The IMF fears the global growth could fall to -3 per cent this year, making it the worst recession since the great depression.
It also estimates that the pandemic could push about 49 million people into extreme poverty in 2020 alone. According to the World Bank, COVID 19 poses as an unprecedented threat to development growth in Sub Saharan Africa (SSA). It estimates growth in SSA to decline from its 2019 value of 2.4% to between -2.1% and -5.1 % in 2020, making 2020 the worst year since records began in 1970 for the continent’s economic growth.
Ghana has not been spared of the negative effects of the pandemic. Even though the impact is still unfolding and the extent cannot be estimated with certainty the pandemic is expected to negatively impact the economy and erode some recent achieved economic and social gains. Real GDP growth, for instance, is projected to decline from a projected 6.8% to about 0.9% and deteriorate further in a worst case scenario for the 2020 ﬁscal year. The fiscal situation is expected to worsen from a projected budget deficit of 4.5% of GDP to about 11.4% of GDP. This arises from shortfalls in petroleum receipts of GH¢5,105 million; Non-Oil Tax revenue of GH¢4,269 million; and Non-Tax Revenues (Non-Oil) of GH¢3,941 million, and Other Revenues of GH¢17 million, compounded by increasing covid 19 expenditures. These expenditures are projected to include the cost of a COVID19 preparedness and response plan of about USD $100 million, in addition to other expenditures to cater for the provision of Health Infrastructure (Agenda 88+), Coronavirus Alleviation Programme, Capitalisation of National Development Bank, Security, Elections, and payment of outstanding claims.
On the face of covid 19 pandemic Ghana is likely to experience reductions in:
- in international trade volumes as a result of COVID 19 related lockdowns and other trade restrictions measures taken by Ghana’s trading partners.
- in Foreign Direct Investment (FDI) and portfolio investment, in foreign remittances, a squeeze in the domestic financial system and fewer funding avenues from foreign sources.
- in oil prices resulting from falling oil demand and worsening price wars among oil producers.
- in bilateral aid.
- in consumer demand for goods and services.
These effects are likely to translate into welfare losses and increases in poverty levels, which Ghana has in the past decade done so well to reduce. With the country having achieved many of the MDGs even ahead of schedule date of 2015, it was expected to do well with the successor global development framework, the SDGs, through intensified socio-economic investments. However, large fiscal, monetary, and financial policy stimulus to solve the crisis is already draining domestic resources from financing the SDGs. The situation in COVID 19 pandemic is certainly not good for achieving the Sustainable Development Goals (SDGs), which the country has only ten years to attain. Already the slow pace of efforts to achieving the SDGs has heightened anxieties of a reversal of recent SDG gains. Against this background Ghana needs to do a serious policy re-engineering if it were to achieve the SDGs, whilst fighting the Covid-19 pandemic.
The approach the Ghana government, therefore, takes will have long-lasting effects and must avoid deepening the root causes of poverty, inequality, deprivation, climate change, and conflict. The country’s policy responses to the outbreak must, consequently, be designed with a gender lens, and pay special attention to those living in extreme poverty and rural communities, with disabilities and the many poor engaged in subsistence farming. Furthermore, responses must be equitable and reachable to the digitally isolated.
Hence for the country to achieve the SDGs it is crucially necessary that its policies, actions, and investments to recover from the COVID-19 pandemic are guided by the 2030 Agenda.
Published by Appiah-Kubi, Kojo (PHD)