Former Finance Minister Seth Terkper and economics lecturer with the University of Ghana Business School (UGBS), Professor Godfred Bokpin, have described as unprecedented, the over $4.5 billion fiscal support from multilateral creditors and theBank of Ghana (BoG) to government to tackle the Covid-19 pandemic.
According to the two, never has the country enjoyed such fiscal support in its management of economic crisis – not even during the global financial crisis.
Speaking at the 10th edition of the Business and Financial Times Ghana Economic Forum (GEF), the former Finance Minister averred despite the Covid pandemic creating a fiscal gap between 2 to 3 percent of GDP (approximately $2 billion), the country had received more fiscal support than it needed to tackle the pandemic adding that government has to be candid about the true fiscal deficit created by the pandemic.
“Reports from the IMF disclose a fiscal gap of covid to be 2-3 percent of GDP and considering that we have had $4.5 billion in support from the BoG, IMF, World Bank among others to support the crisis, it makes it unprecedented in the history of management of crisis in our economy and government has to be candid about it, ”said Mr Terkper.
Mr Tekper holds the view the budget deficit of 11.7 percent recorded for last year cannot be attributed to the impact of Covid alone, especially when the costs of the pandemic had been catered for by loans from multilateral institutions like the IMF and World Bank.
On his part, Prof. Bokpin noted the unprecedented fiscal support received and used as stimulus packages for the various sectors of the Ghanaian economy was necessary as the pandemic had affected the nation’s income flow adding that Ghana with the rest of the countries in the West African sub-region lost over $40 billion in revenues.
“I agree with Mr Terkper on the fact that the $4.5 billion support from the IMF and World Bank in terms of the crisis without conditionalities is unprecedented and that the use of the funds by government in the form of stimulus packages for businesses in the various sectors was needful because this is a pandemic of inequality and is one of a kind because its economic impact will go over a century.
“Ghana and West Africa, in general, lost over $40 billion in national income,” he said.
He, however, lamented that government in the year 2021 seems to be rolling back the support it provided businesses amid the pandemic asserting that doing so could reverse the economic gains made from last year.
“Support provided by government seems to be rolled back, we have shifted from the embracive approach and now trying to deal with the pandemic from an austerity approach and that’s where I think we are failing and not building the economy to be resilient.
“Since the beginning of this year over Ghs 9 billion in government expenditure to be used in stimulating the economy has been cut, and numerous taxes imposed on businesses and individuals which I believe is counter-productive.
“And when you look at that, you notice that we are practically undoing all the gains we made in 2020 and hence the recovery of the economy will not be a V-shaped one as expected,” he stated.
This year’s GEF edition focuses on the youth and is held under the theme ‘Strengthening Home-grown Policies to Underpin the National Digitisation drive and Shared Financial Prosperity’.
The three-day event is chaired by the Chief Executive of the Ghana National Petroleum Corporation (GNPC) Dr. K.K. Sarpong, and will assemble experts from various sectors of the economy to discuss and proffer different solutions for economic development.
The speakers and panels will include the Governor of the Bank of Ghana, Dr. Ernest Addison; Commissioner of the Ghana Revenue Authority, Mr. Ammishaddai Owusu-Ansah; Former Minister of Finance, Seth Terkper; CEO of the Ghana Gas Company, Dr. Ben Asante; CEO of Dalex Finance Mr. Kenneth Thompson; and Madam Nathalie Akon Gabala, Regional Director West, Central and Northern Africa-Mastercard Foundation
The rest includes economist and lecturer at the University of Ghana Business School, Prof. Godfred Bokpin; Deputy Managing Director of the Ghana Stock Exchange, Ms. Abena Amoah; President of Virtuous Pot, Gloria Obuobisah; Managing Director of Absa Bank Ghana, Ms. Abena Osei-Poku; and Managing Director of Fidelity Bank, Julian Opuni, among many others.