Home | Goldstreet Business
Sunday, January 17, 2021
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
  • Home
  • General News
    • Extractives
    • Auto
  • Business
    • Banking and Finance
    • AgriBusiness
    • Insurance
    • Mining
    • Oil and Gas
    • Real Estate/Housing
  • News
    • Top Stories
    • Agriculture
    • Maritime/Aviation
    • Energy
    • Education
    • Construction
  • Technology
    • ICT
    • Telecom
  • World
    • Africa
    • International
  • Editorial/Features
  • GSB Data Services
No Result
View All Result
Gold Business Logo
No Result
View All Result
Home Editorial/Features

Extraordinary circumstances require extraordinary fiscal deficit

March 27, 2020
in Editorial/Features
0
Share on FacebookShare on Twitter

As the number of  confirmed cases of coronavirus infection grows by the day in Ghana resulting in a far higher and faster growing number of requisite quarantines, the question is no longer whether the country needs to be locked down, but rather it has become whether the economic effects on most Ghanaians would not be worse than the health dangers presented by the virus itself.

Simply put, Ghana lacks the financial resources to provide an economic safety net for the millions of Ghanaians who would not be able to cope with a full fledged lock down enforced by government and this is the only thing now staying the hand of the country’s leadership against declaring one.

RELATED POSTS

Ghana’s bounce back can be far from being a far-fetched dream

“Hearty Akwaaba, Ghana!”

However, without a lock down, the spread of the virus will over-stretch Ghana’s ill-prepared public health system long before the virus burns itself out, as optimistically expected by most medical experts.

Either way, government is going to need far more resources than it currently has. Indeed, public policy analysts who agreed with the International Monetary Fund’s call for Ghana to stay within its Extended Credit Facility longer, in order to build fiscal and foreign reserve buffers against possible future shocks now seem to be justified – Ghana has already applied for a new IMF facility to combat the coronavirus outbreak, less than a year after leaving the ECF.

However, in defence of government, the current situation was entirely unforeseeable; no economic projections, based on normal parameters could have foreseen Ghana’s current dilemma, even forecasts that assumed global commodity price crashes affecting gold, cocoa and crude oil at the same time.

Indeed it is the deeply extraordinary nature of the coronavirus outbreak and its effects, that is making this newspaper to argue that extraordinary measures be adopted to combat the effects.

Specifically, we are calling for a suspension of the self-imposed five percent ceiling on the annual fiscal deficit in 2020. Afterall, the Fiscal Responsibility Act that sets the ceiling also makes allowance for it to be exceeded in extraordinary circumstances. Surely, the ongoing viral outbreak is the most extraordinary circumstance conceivable.

If Ghana is willing to put the fiscal deficit ceiling aside, there are plenty of potential creditors who would be willing to step up their lending to Ghana. All of our Eurobond issuances have been several times oversubscribed and since the cedi’s exchange rate stabilized, there has been excess capacity for attracting portfolio investment into the country’s sovereign medium and long term domestic debt securities as well.

Of course, taking on more debt would further increase Ghana’s debt servicing obligations too, and these are already inordinately high which is largely why the cap on the fiscal deficit was imposed in the first place.

However, any extra debt taken on because of the viral out break has the potential to reduce the slowdown in Ghana’s economic growth rate – and the hits on labour productivity, incomes and consequent living standards – far more than the increase in debt servicing obligations. In short, properly spent, it would be money worth borrowing.

In these most unusual times flexibility is needed, and this should start with the size of the fiscal deficit.

60

SHARES
facebook Share on Facebook
Twitter Tweet
Follow Follow us
custom Share
custom Share
custom Share
custom Share
custom Share
ShareTweetShare

Related Posts

Ghana’s bounce back can be far from being a far-fetched dream

Ghana’s bounce back can be far from being a far-fetched dream

January 11, 2021
Brickbats, COVID-19 facts “greet” world’s 2 great figures

“Hearty Akwaaba, Ghana!”

January 11, 2021
Brickbats, COVID-19 facts “greet” world’s 2 great figures

Brickbats, COVID-19 facts “greet” world’s 2 great figures

January 11, 2021
China-Africa Cooperation Prospers against Covid-19

China-Africa Cooperation Prospers against Covid-19

January 10, 2021
The decibel of the beep in industries

The decibel of the beep in industries

January 4, 2021
Next Post
Ethiopian Airlines makes cargo delivery to support fight against coronavirus

Ethiopian Airlines makes cargo delivery to support fight against coronavirus

World Bank Group increases COVID-19 response to US$14bn

Ghana, 6 others receive US$ 379m to strengthen statistical systems

Discussion about this post

Archives

<
January 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
▼
>
MonTueWedThuFriSatSun
    123
45678910
11121314151617
18192021222324
25262728293031
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
 123456
78910111213
14151617181920
21222324252627
282930    
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
  12345
6789101112
13141516171819
20212223242526
27282930   
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
     12
3456789
10111213141516
17181920212223
242526272829 
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
1234567
891011121314
15161718192021
22232425262728
2930     
       
    123
45678910
11121314151617
18192021222324
25262728293031
       
    123
45678910
11121314151617
18192021222324
25262728   
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
     12
3456789
10111213141516
17181920212223
24252627282930
31      
   1234
567891011
12131415161718
19202122232425
2627282930  
       
1234567
891011121314
15161718192021
22232425262728
293031    
       
     12
3456789
10111213141516
17181920212223
24252627282930
       
  12345
6789101112
13141516171819
20212223242526
2728293031  
       
      1
2345678
9101112131415
16171819202122
23242526272829
3031     
    123
45678910
11121314151617
18192021222324
252627282930 
       
 123456
78910111213
14151617181920
21222324252627
28293031   
       
      1
2345678
9101112131415
16171819202122
23242526272829
30      
   1234
567891011
12131415161718
19202122232425
262728293031 
       

RECOMMENDED

Government has not increased import duties – GSA

GSA maintains fees to bring relief to importers and traders

January 15, 2021
Make COVID-19 testing free – Ghana Medical Association

Make COVID-19 testing free – Ghana Medical Association

January 15, 2021

MOST VIEWED

Plugin Install : Popular Post Widget need JNews - View Counter to be installed
  • Energy
  • Health
  • Auto
  • International
  • Subscription Form
  • Staff Webmail
  • About Us
  • Contact Us
Call us: +233 24 432 0902 | info@goldstreetbusiness.com

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

No Result
View All Result
  • Homepages
    • Homepage Layout 1
    • Homepage Layout 2
  • World
  • Business
  • Technology
  • Health

© Copyright © 2020 goldstreetbusiness.com. All Rights Reserved.

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.