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This isn’t really going to be a pleasant experience for Ghana AT ALL
There are two parts to look at during a period like this. The impact on government and also businesses/consumers (Ghanaians)
[A THREAD]
There are two parts to look at during a period like this. The impact on government and also businesses/consumers (Ghanaians)
[A THREAD]
Total revenue shortfalls for this year is about Ghc9bn. GoG will surely focus on finding capital to fill the gap to be able to meet spending targets for the year. There are various tools on the table at this point.
1.BoG making available capital for GoG to borrow to meet..
1.BoG making available capital for GoG to borrow to meet..
...its spending.
2.Waiving of interest payment on loans esp foreign debt for this year to make room for fiscal space
3.Taking on more debt from international creditors (World Bank, IMF, AfDB etc) https://www.bloomberg.com/news/articles/2020-03-23/africa-needs-waiver-on-44-billion-interest-bill-to-combat-virus
2.Waiving of interest payment on loans esp foreign debt for this year to make room for fiscal space
3.Taking on more debt from international creditors (World Bank, IMF, AfDB etc) https://www.bloomberg.com/news/articles/2020-03-23/africa-needs-waiver-on-44-billion-interest-bill-to-combat-virus
4.Touching on the stabilization fund/Heritage Fund to meet spending goals for this year
5.Whatever is probably available I have no idea of. LOL
These available tools may help but the sad reality is, it might not be enough. We should be ready to experience further currency
5.Whatever is probably available I have no idea of. LOL
These available tools may help but the sad reality is, it might not be enough. We should be ready to experience further currency
depreciation (making our interest payment more expensive), possible downgrading of our credit rating by Moody, Making it far more expensive to borrow and revenue shortfalls from commodities/taxes (oil crash and low demand for products). This is going to squeeze the spending
space for GoG moving forward. BoG has revised Growth rate from 6 to about 2.6 to which I think is a more optimistic figure. Seeing the possibility of contraction/recession using other areas as a case study. (SA, Kenya, Nigeria)
https://www.mckinsey.com/featured-insights/middle-east-and-africa/tackling-covid-19-in-africa
Looking at the business..
https://www.mckinsey.com/featured-insights/middle-east-and-africa/tackling-covid-19-in-africa
Looking at the business..
side, disruption in the supply chain, low demand of product, currency issues, and reduction in foreign investment will definitely hit hard on businesses. We expect to see folding of some businesses and cutting back on cost fo others. This will push unemployment up about 2 to 4%
(i.e 8 to 10%rate discretional figure), the surge in poverty levels and more pressure on social spending by GoG, defo affect our human capital due to the COVID19 impact on schooling. We expect the number of school dropouts to increase esp with females. (Period where we need our
feminists). Consumers will surely be impacted heavily, currency depreciation will surge prices of goods/services. Those who will lose their jobs during this period would really have a tough time esp if families depend on them. New Graduates should embrace themselves for
difficult times. It will be hard finding a job and I don’t mean the usual hard. This time REALLY HARD.
So when you wake up in the morning, please say something to God. In these times, it is far more important.
So when you wake up in the morning, please say something to God. In these times, it is far more important.
