Accra, Ghana, March 9, 2020//-The spread of coronavirus now known as COVID-19 which is moving quickly from China to 77 more countries will hurt Ghana’s economy.
Although Ghana has not yet reported any case of the deadly disease, the effects on its economy are many, in the past week Ghana Union of Traders’ Association (GUTA) warned of price hikes as members are not able to import spare parts from China.
The immediate positive effects on the cedi will be eroded by lower exports and fiscal losses because of extra precautionary measures in many economies, analyst Prof John Gatsi said.
He added: “Ghana’s budget implementation is about to suffer as the average crude oil price of $58 per barrel projected in the 2020 budget has since dropped to around $44. Meaning the first quarter is likely to suffer about 24% reduction and if volume of production remains the same then revenue loss maybe around same level”.
If the loss of about $10 of crude oil price persist or remains at the current price level for an extended period it will have deep negative volumetric effects on petroleum revenue and there maybe the need for adjustments in macroeconomic expectations, according to Prof Gatsi.
This he explained has implications for the amount of money to be available for transfer to the Annual Budget Funding Account (ABFA) and possible depletion of the stabilization fund.
The ABFA is the account set up by Ghanaian government that receives allocation from oil and gas revenue in support of the country’s budgets.
“Projects anchored on the ABFA are expected to suffer if the global coronavirus spread is not contained and mitigated quickly”, Prof Gatsi stated.
Indeed, external developments do affect domestic economic outcomes, the analyst maintained.
A total of 93,200 (including 80,380 in Mainland China, Hong Kong, and Macau) confirmed cases of novel coronavirus infection including 3,204 deaths (including 2,983 in China, 79 in Italy, 77 in Iran, 32 in South Korea, 12 in Japan, nine in the US, four in France, and one each in the Philippines, San Marino, Spain, Australia, Thailand, and Taiwan) have been reported across the world, according to the World Health Organization (WHO).
The COVID-19 disease is therefore becoming a human tragedy as well as an economic tragedy, threatening to erode the global economy gains.
It has prompted an unprecedented lockdown in China with knock-on effects on all the sectors of the global economy: aviation, automobile, banking and finance, education, health, manufacturing, oil and gas, trade and investment, among others.
However, there have been three reported cases of the COVID-19 disease in Africa so far, experts are still wondering why the continent is the least affected in the world.
So far eight cases of infection have reported in Africa. Senegal alone recorded four cases on foreign nationals with no death. Egypt, Algeria and Nigeria reported one each with no death, while a student who contracted the disease in Cameroon has been recovered.
African Eye Report
