Data released by the Bank of Ghana indicates that the national economy has experienced a recession since the middle of March 2020 when government began taking measures to contain the spread of the novel Coronavirus.
According to the Bank, the national economy contracted by 2.2 percent in March 2020, as compared to a growth of 5.6 percent for the same period last year.
Also, preliminary estimates by the Bank show that Ghana’s growth rate in this year is likely to be between 2.0 and 2.5 percent.
It will be recalled that, Ghana recorded its first case of the novel Coronavirus on March 12, 2020.
In a statement issued the Bank, the Governor, Ernest Addison, explained that, “leading indicators of economic activity during the first quarter of the year suggests some slowdown, reflecting the restrictions, social distancing, and the partial lock-down measures introduced by the government in the middle of March.”
Retail sales picked up in March 2020 due to panic buying which preceded the partial lock-down, while consumption, proxied by Domestic VAT receipts, dipped. The slow conditions in economic activity is reflected in port activities and a sharp decline in tourist arrivals which also affected the private sector’s contributions to social security.”
“As a result of these developments, the Bank of Ghana’s Composite Index of Economic Activity (CIEA) contracted by 2.2 percent in March 2020, compared to a growth of 5.6 percent for the corresponding period of 2019,” he added.
The Central Bank Composite Index of Economic Activity helps businesses and investors to plan their activities around the expected performance of the economy and protect themselves from economic downturns.
Earlier this year, the Bank of Ghana anticipated a worst-case GDP growth rate scenario of 2.5% for 2020, should the virus continue to linger for the rest of the year.
The Finance Minister, Ken Ofori-Atta, also admitted that it was impossible for government to have continued the partial lock-down imposed on Accra, Tema, Kasoa and Kumasi beyond the three weeks announced by President Akufo -Addo as the Ghanaian economy, which is largely informal, cannot sustain that decision beyond the three-weeks.
Although the effects of the COVID-19 pandemic has been dire, government has rolled out measures to bring relief to businesses and individuals.
Government has established the Coronavirus Alleviation Programme (CAP) to facilitate economic recovery.
It has lowered the cap on the Ghana Stabilization Fund (GSF) from the current US$300 million to US$100 million to allow for transfer of excess funds to the CAP.
It has also has put in place a GHS600 million soft loan scheme with a two-year repayment plan for micro, small and medium scale businesses and taking care of water bills for all Ghanaians for April, May and June 2020.
Commercial banks are providing a syndicated facility of GHS3 billion to support key industries; to grant six-month moratorium on principal repayments for selected businesses; and a reduced interest rate to increase credit supply to the private sector.
There’s also a relief for electricity consumers, where all lifeline consumers will get a one hundred percent waiver for three months; while other consumers will get a fifty percent reduction.
Water is also free for all Ghanaians for a period of three months.