The Minister of Finance, Ken Ofori-Atta, has told the Parliament of Ghana that containment measures of the coronavirus (COVID-19) may lead to reduced productivity and job losses in the global market, including Ghana as a result of slowdown in economic activities.
This, he noted, had to do with the pursuit of tight conditions both in the global and domestic financial markets as result of the COVID-19 pandemic which has so far affected 739,385 lives and caused 35, 019 death with 156, 588 people recovered, according to www.worldometers.info.
Mr. Ofori-Atta who had come to Parliament on Monday, March 30, 2020, to brief Members on the impact of the coronavirus (COVID-19) pandemic on the Ghanaian economy further said the slowdown in economic activities is likely to result in debt service difficulties, especially, from the sectors that are hard hit such as aviation and hospitality.
In the wake of the coronavirus, the World Health Organization has urged affected nations to observe social distancing measures including limiting large groups of people coming together, closing buildings and canceling events. Others include using web-based learning and canceling all large campus meetings and gatherings as well as the closing of schools and universities.
Commenting further, Mr. Ofori-Atta said the coronavirus pandemic has also negatively affected Capital Flight.
“COVID-19 has also starved off Capital flight as a result of belated bearish emerging markets sentiments and given the high proportion of about 25% bonds spell by non-resident investors”, he noted.
Capital flight is a large-scale exodus of financial assets and capital from a nation due to events such as political or economic instability, currency devaluation or the imposition of capital controls, according to www.investopedia.com.
In addition to the challenges enumerated, the Finance Minister said the coronavirus pandemic has resulted in the increase in demand for dollars, a situation he noted, will impact negatively on Ghana’s foreign reserves.
“Ghana’s successful and timely raising of US$3billion dollars from the Eurobond market in early February this year has been extremely, should I say, divinely helpful and provided us with the needed buffer to anchor the Cedi”, he assured, urging that “in this apocalyptic times, we must do all we can to conserve and preserve our foreign exchange reserves”.