- Ghana must position itself well to grow in these turbulent times.
- Economic prospects look dire for globally and locally.
- 49 million Africans to be pushed into extreme poverty.
A lecturer at the University of Ghana, Dr. Richard Ayisi has said that Ghana can thrive economically regardless of the economic impact of the Coronavirus.
According to the lecturer, if sound economic policies are employed in this crucial time the country can gain rather than suffer from the impact of the virus.
“The COVID-19 has actually impacted negatively on the global economy. But as we all know with good policy direction we will be able to mitigate the effect of this COVID impact. I think Ghana, we can benefit from the COVID-19 rather than going through bad effects.”
According to the lecturer, this is because the pandemic has highlighted the importance of the local economy and if the country directs its energies to improve local economic activities, the impact of the virus will be minimal.
“The reason is that we depend on foreign products. The COVID-19 has taught us not to depend on external activities. If we position ourselves very well to domesticate our economy, I think we will benefit from it more than suffering from the COVID-19.”
Dr Ayisi also added that, because the country’s economic activities are “more informal,” the government must focus on supporting the activities of the informal sector to aid the rapid growth of the economy. This, According to him will help create a bulwark for Ghana’s economy in these turbulent times. Ghana’s economy is dominated by a little over 70 percent informal economic activities
Even though Dr Ayisis is optimistic about Ghana’s prospects in the midst of waning confidence in the global economic activities, assessment by global financial houses are stark.
The Africa Development Bank (AfDB) has projected that 49 million Africans could be pushed into extreme poverty because of the COVID-19. This was contained in the 2020 African Economic Outlook.
The report projects that, Real GDP of Africa will contract by 1.7 percent in 2020. This is a drop by 5.6 percentage points from the January 2020 pre covid-19 projection.
Zooming in on the situation in West Africa, the AfDB’s report revealed that the region had high prospects before the outbreak of the pandemic. In addition, the bank indicates that the actual impact of COVID-19 on the continent cannot be sleuthed with certainty because the pandemic is still unfolding.
“Prior to the outbreak of the COVID-19 pandemic, West Africa region was poised to expand by 4.0 percent in 2020.The magnitude of socioeconomic impact of the COVID-19 pandemic on countries in West Africa may not be known with certainty as the situation remains fluid.”
The biggest lender on the continent goes on further to say that, their preliminary appraisal indicates dire growth as production is projected to fall by -4.3 if the pandemic continues to the end of this year.
“However, early assessment suggests that the prospect for initial growth projection is now evidently remote. Thus, under a conservative baseline scenario, the economy is now projected to contract by -2.0 percent in 2020, 6 percentage points below the projected growth rate prior to the pandemic. Real output could fall by as much as -4.3 percent in a worst-case scenario with prolonged duration and depth of the spread of the COVID-19 pandemic until the end of 2020.”
The AfDB points out that, countries on the West Coast of the continent will be impacted in several ways.
These according to the bank include; “decline in commodity prices, low financial flows, reduced tourism earnings and heightened volatility in financial markets. Deceleration in output growth will be reflected in negative growth in per capita income of 4.3 percent with the attendant social ramifications.”
Meanwhile, globally, the International Monetary Fund (IMF) has projected that economic activities will contract by 4.9 percent.
The IMF has also forecasted that, the Ghanaian economy will contract by 1.5 percent as a result of the pandemic.
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