US$100 COVID-19 Cash Secured And Available – Finance Minister

Government says the cedi equivalent of US$100 announced by President Akufo-Addo as being set aside to fight against the novel coronavirus pandemic in Ghana is ready for disbursement.

“Contrary to views of some sceptics that the money is not available, I wish to assure you that the money has been secured and is available to be disbursed in accordance with our public financial management procedures and rules. Indeed, from day one, Government has not stopped spending in the fight against Covid-19”, the Ken Ofori-Atta, the Finance Minister told Parliament yesterday.

He was in the House to brief the legislative arm of government on the economic impact of the covid-19 pandemic on the economy of Ghana.

Preparedness & Response Plan

“Mr. Speaker, the Ministry of Finance has been working with the Ministry of Health to cost the National Preparedness and Response Plan prepared by the Ministry of Health and the World Bank. The Preparedness plan seeks to, among others, enable early detection and effectively manage and contain a COVID-19 outbreak in Ghana.”

The Minister stated that the initial cost of programmes and activities under the COVID-19 Preparedness and Response Plan is about GHȼ572 million (US$100 million).

The plan, he explained, seeks to strengthen co-ordination of the overall preparedness activities; strengthen capacity of regions, priority health facilities and points of entry to prevent, rapidly detect, investigate and control any COVID-19 outbreak in Ghana and strengthen national capacity for laboratory surveillance and diagnosis;

It is also expected to build capacity for early diagnosis, case management, contact tracing and infection prevention and control; ensure minimum health logistics are in place in prioritised regions, health facilities and points of entry for preparedness and laboratory capacity sustained for timely and quality testing of COVID-19 samples; and increase public awareness on COVID-19 risk mitigation and response measures.

Coronavirus Alleviation Programme

The Finance Minister stated that the Economic Management Team is working around the clock to reduce the accumulation of economic scar tissue from this disease, adding that the President is determined to cushion the economic and social difficulties this coronavirus is visiting on Ghanaian businesses and people.

“Our task, therefore, is to minimize the huge threat of job losses and the impact of job losses. The President and his team are thinking outside the box to ensure that that the principles of fiscal discipline are not jettisoned and, yet, still ensuring that people have money to spend.”

“Our plan is to ensure that essential public investments are not mightily compromised; whiles, at the same time, enabling significant increase in spending on health. Beyond that, Government is committed to using this unprecedented challenge to our economy and society as rather an opportunity to fast-track even more our agenda to industrialize and become self-reliant.”

Mr. Ofori-Atta further explained that the establishment of a Coronavirus Alleviation Programme (CAP) as announced by the president on Friday, March 27, 2020 is to mitigate the impact of the coronavirus on businesses and households and ensure that economic activities are sustained, while minimizing job losses.

He added that his “will immediately release an amount of One Billion Ghana Cedis upon approval by Parliament. The Ministry is proposing to use the equivalent of USD 219 Million from the Stabilization Fund.”

“The CAP will focus on areas that will provide maximum results in alleviating the impact of the coronavirus pandemic with a focus on protecting against job losses, protecting livelihoods, supporting small businesses, and ensuring the programme is efficiently and sustainably implemented.”

The Finance Minister also said the CAP would seek additional funding for the following purposes; promotion of selected industries to shore up production for export and import substitution, to support SMEs and create jobs, to partner with Pension Funds and Insurance Funds to create guarantees and first loss instruments.

“Targeted businesses and households will include those in the health sector, education sector, hospitality industry, SMEs, and households hard hit by the Coronavirus. The specific details of the CAP and the instruments to allocate the resources will be fashioned out shortly.”

Mitigating COVID-19 impact

“Mr. Speaker, as the President reminded us last Friday night, we know how to bring the economy back to life – every Ghanaian knows this from our performance over the last three years. But what we do not know is how to bring people back to life. We shall therefore spread every sinew to support our households and revitalize our industries and services.”

Touching on the measures to close the fiscal gap, the Minister proposed to House to Lower the cap on the Ghana Stabilization Fund (GSF) from the current US$300 million to US$100 million in accordance with Section 23 (3) of the Petroleum Revenue Management Act (PRMA).”

“This measure will enable the excess amount in the GSF account over the US$100 million cap to be transferred into the Contingency Fund, consistent with Section 23 (4) of the PRMA. The amount transferred into the Contingency Fund will be used to fund the Coronavirus Alleviation Programme (CAP).