Finance Minister, Ken Ofori-Atta has suggested that one of the assured ways to deal with testing times such as a result of the coronavirus pandemic lockdown is to consider unemployment benefits for citizens.
Presenting a statement to Parliament after the approval to lower the cap on the Ghana Stabilisation Fund (GSF) from the current US$300m to US$100m, he said “We still don’t have unemployment benefits in this country and now that is the time to also begin to look at what we have to do with unemployment benefits.
It is going to lead to a whole recalibration of a lot of issues that goes into the heart of protecting citizens in this time”.
Furthermore, he indicated that the bulk of Ghanaians are informal entrepreneurs and “when we look at our statistics, it is almost 24percent of our people earning below GH₵1,700 a year and when you do a lockdown, these are people who earn their income on a daily basis.
A lockdown does not enable them to be able to get income to be able to support their family, we are going to have to rethink some of the laws that we have to make sure we save our people and so I will beg your indulgence for deep thought and consideration of some of these rules to make sure that we will have a future for our people” he told lawmakers in Parliament”.
According to him, he stated that government is expecting it to impact the economy by 5 to 10 percent of the country’s GDP.
He also disclosed that the Ministry of Finance is putting together a new programme, the COVID-Care and Revitalisation of Enterprises Programme to begin to look at how “we can get to our SMEs, micro-finance institutions and how to support other industries”
The Finance Minister also bemoaned businesses in the hospital industries stressing that occupancy rates have dropped, whiles others are laying off about 90percent of their employees.
Parliament approves CAP of GSF
The proposal to lower the cap on the Ghana Stabilisation Fund (GSF) from the current US$300m to US$100m has been given legislative backing.
The approval by Parliament means the Ministry of Finance has the authorization of the intended expenditure out of the Contingency Fund towards meeting the challenges posed by the COVID-19 pandemic.
This was contained in the Report of the Finance Committee on the Request to lower the Cap on the Ghana Stabilisation Fund(GSF) from the Current US$300m to US$100m in Accordance with section 23(3) of the Petroleum Revenue Management Act, 2011(Act 815)
Furthermore, lowering of the cap on the GSF from US$300m to US$100m will enable the excess amount in the GSF over the new cap level to be transferred into the Contingency Fund for use to fund the Coronavirus Alleviation Programme (CAP) among others.
The scale and severity of the impact of COVID-19 on Ghana will depend on the scope and nature of responses from Ghanaians as well as from government and its international Development Partners (DPs).
To minimize the fiscal impact of the COVID-19 on businesses as well as households and ensure that economic activities are sustained, the government has proposed a number of measures, one of which is to lower the cap on the Ghana Stabilisation Fund (GSF) from the current US$300.00million to US$100.00million in accordance with Section 23(3) of the Petroleum Revenue Management Act, 2011(Act 815)
The total estimated fiscal impact from the shortfalls in petroleum receipts, import duties, other tax revenues and the immediate cost of the Coronavirus Alleviation Programme is GH₵9.5billion(2.5percent of revised GDP).
To close the fiscal gap therefore, government has proposed a number of policy measures, including the present proposal to lower the cap on the Ghana Stabilisation Fund (GSF) from the current US$300m to US$100m.
The need to spend from the Contingency Fund, is provided for in Article 177(1) of the Constitution which states that “There shall be paid into the Contingency Fund moneys voted for the purpose by Parliament and advances may be made from that Fund which are authorized by the committee responsible for financial measures in Parliament whenever that committee is satisfied that there has arisen an urgent or unforeseen need for expenditure for which no other provision exists to meet the need”.
The Coronavirus Disease 2019(COVID-19) pandemic caused by a novel coronavirus (SARS-CoV-2) is prevalent in over 110 countries and territories, including Ghana. As of March 23,2020, the outbreak had recorded nearly 436,024 cases and 19,630 deaths globally according to the Coronavirus Worldometer.