Finance Minister announces three-year COVID-19 support programme

The Finance Minister, Ken Ofori-Atta, has announced a new initiative to bolster the economy called the COVID-19 Alleviation and Revitalization of Enterprise Support Programme.

This three-year plan is also known as the Ghana Cares programme.

According to the Finance Minister, it will take about three years for the Ghanaian economy to fully recover from the impact of COVID-19.

Speaking on the Floor of Parliament on Thursday, May 28, 2020, the Finance Minister indicated that the programme will ensure the sustained growth of the economy.

“The Ministry of Finance is developing a three-year COVID-19 alleviation and revitalization of enterprise support programme –the Ghana Cares programme–to help revitalize the economy.”

“We are confident that this programme will help us stabilize and revitalize the economy,” said Mr. Ofori-Atta.

The pandemic has brought three years of economic growth of at least 6 percent to a sudden halt.

The government anticipates that growth could slow to 1.5 percent, the least in 37 years.

Other interventions

In a bid to cushion Ghana’s economy for the impact of coronavirus, the government has, among others launched a GHs1 billion Coronavirus Alleviation Programme Business Support Scheme.

This is being provided by the government and selected participating banks to micro, small and medium-scale businesses around the country.

The government has indicated that the cumulative effect of the pandemic will cost Ghana GHS9.505 billion.

Out of the GHS1.2 billion earmarked for Coronavirus Alleviation Programme Business Support Scheme, GHS600 million will be disbursed as soft loans to micro, small and medium scale businesses with a two-year repayment plan.

The government is also leaning on an IMF Rapid Credit Facility of US$1 billion, World Bank Development Policy Operation (DPO) of US$350 million and the Stabilisation Fund of $ 219 million.

GHs5.5 billion from BoG

The Finance Minister also noted that the Bank of Ghana has already advanced GHs 5.5 billion to government in May 2020 to meet its financial obligations as part of moves to secure GHs 10 billion from the central bank.

The GHs 5.5 billion first instalment of the bond was released on May 15, 2020.

By this, the Bank of Ghana has set aside a Memorandum of Understanding with the IMF which bars it from financing the government’s budget which had been the case in previous years.

The additional GHs 4.5 billion cedis will be provided through the purchase of government assets.