Overview
As of May 20, 2020, Ghana recorded 6,096 confirmed COVID-19 cases and 31 deaths. Starting March 16, the government adopted sweeping social distancing measures and travel restrictions to avert an outbreak, including (i) suspension of all public gatherings exceeding 25 people for four weeks; (ii) closure of all universities and schools until further notice; and (iii) mandatory 14-day self-quarantine for any Ghanaian resident who has been to a country with at least 200 confirmed cases of COVID-19, within the last 14 days. On March 23, Ghana closed all its borders to travelers. On March 30, a partial lockdown of major urban areas was implemented. As an oil exporter, Ghana is significantly affected by the large decline in oil prices.
Travel Restrictions
1. Flights to Ghana are suspended.
- This does not apply to emergency flights, humanitarian flights, technical landing for refuel and medical evacuation flights.
2. Airline crew will undergo mandatory quarantine during their rotation/rest period.
Source : IATA Timatic
Economic Measures
Reopening of the economy. Starting on April 23, the partial lockdown has been lifted following aggressive contact tracing, expansion of treatment and isolation centers, enhanced testing capacity, better understanding of the virus contagion dynamics, increased capacity to produce sanitizers and medicines, and severe impact of the lockdown on the most vulnerable.
Key Policy Responses
FISCAL
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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 (e.g., pharmaceutical sector supplying COVID-19 drugs and equipment), the support of SMEs and employment, and the creation of guarantees and first-loss instruments. Additional funds have been earmarked to address 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.
To compensate for larger spending related to the COVID-19 crisis, the government plans cutting spending in goods and services, transfers, and capital investment (also reflecting the lower absorption capacity of the economy due to the pandemic), for a total of at least GHc 1.1 billion (0.3 percent of GDP). Also, the government 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 GHc 1.2 billion (0.3 percent of GDP).
To reduce the financing needs, the government will draw US$218 million from the stabilization fund, and will borrow up to GHc 10 billion from the Bank of Ghana.
MONETARY AND MACRO-FINANCIAL
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The Monetary Policy Committee (MPC) cut the policy rate cut by 150 basis points to 14.5 percent on March 18, and announced several measures to mitigate the impact of the pandemic shock, including lowering the primary reserve requirement from 10 to 8 percent, lowering the capital conservation buffer from 3 to 1.5 percent, revising provisioning and classification rules for specific loan categories, and steps to facilitate and lower the cost of mobile payments. The committee also signaled it would continue to monitor the economic impact of COVID-19 and take additional measures if necessary.
At its May 15 meeting, the MPC kept the policy rate unchanged and announced a new bond purchasing program to provide emergency financing to the government in light of a higher projected fiscal financing gap. A 10-year bond with a face value of GHc 5.5 billion (1.4 percent of GDP) has been purchased, and the MPC indicated that future purchases may increase up to GHc 10 billion. The MPC also announced relief measures for small depository institutions and a US$1 billion repo agreement with the U.S. Federal Reserve under its FIMA facility.
EXCHANGE RATE AND BALANCE OF PAYMENTS
Source : IMF & WB
