23.03.2020 General News

Coronavirus: Rely On BoG Reserves To Combat Spread – Minority To Gov't

Coronavirus: Rely On BoG Reserves To Combat Spread – Minority To Gov't
LISTEN MAR 23, 2020

The Minority in Parliament wants government to rely on reserves at the Central Bank to implement pro-poor measures to support individuals and firms that will be worst hit by the novel coronavirus pandemic.

The measures the Minority is proposing include rent subsidies and freezes, deferral of tax payments and a stimulus package for businesses.

Speaking to Citi News on a memorandum submitted to the Speaker of Parliament, Prof. Mike Oquaye, Ranking Member on the Finance Committee of Parliament, Cassiel Ato Forson said that Ghana's economy should be able to support such measures.

“We expect the government to tap into the reserves. We have the stabilization fund and things like the Central Bank reserves that they have posted out there…In times like this, there is the need for the Central Bank to make available some reserves to make the government draw from it,” he said.

Finance Minister, Ken Ofori-Atta had noted that the government will rely on a mix of funds from the World Bank, the International Monetary Fund and withdrawals from the Stabilisation Fund to finance the budgetary gap expected to be created by the fiscal impact of the novel coronavirus pandemic.

According to him, this has become apparent as receipts from the petroleum industry, revenue from the tourism and aviation industries among others, have been projected to suffer a massive hit from the meltdown associated with the novel virus.

Addressing Parliament on the fiscal impact of the coronavirus, Ken Ofori-Atta said government will return to Parliament for the legal backing required to access the required funding to bridge the expected financing gap.

Tough times, stimulus package

Chief Executive Officer of Dalex Finance, Ken Thompson had also predicted a prolonged economic crisis in Ghana following the outbreak of the virus.

Mr. Thompson among other things proposed a stimulus package that the government must ensure that Ghana's economic fortunes do not recede and bring relief to the citizenry during and after the COVID-19 outbreak.

He, however, did not rule out the possibility of the country returning to the International Monetary Fund ( IMF) for a bailout to shore up the economy and manage the impacts.

“[We should go for money from IMF], because we do not have a choice. What choice do we have? So we may have to go for extra money from the IMF. I can see it coming because the government is always crashed and companies are grinding to a halt.”


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