PRESENTATION BY CASSIEL ATO FORSON (MP), A FORMER DEPUTY MINISTER FOR FINANCE & MEMBER OF THE NDC COVID-10 TECHNICAL TEAM
SUGGESTED FUNDING SOURCES TO FIGHT COVID-19
1. To be effective at implementing solutions to any of the measures outlined by my colleagues in a timely manner – and if we are to give ourselves a fighting chance – we will have to act now. The window of opportunity, as we have already said, should be measured in days and certainly not weeks.
2. But these or any other proposals will require the rapid deployment of funds to procure needed equipment and supplies; improve awareness and accelerate our readiness; reinforce the healthcare system; establish a morally sound safety net for the vulnerable; and safeguard our economy & enterprises against the inevitable shocks. We must be able to use those funds in response to the evolving situation in the interest of the nation, which requires us to also have great flexibility to reassess and reprioritize over the coming weeks.
3. We are aware that our Government has approach the IMF and World Bank for an amount close to $1 billion. We harbour sincere reservations about the wisdom of that course under the time pressures we face. We are reliably informed – and the government is aware – that any such facility would not be available to us until the second or third week of April.
4. That timeline is constrained by the meeting schedule of the boards of the respective organisations and the processes involved in receiving the funds even under emergency approval. Our current state of readiness and the exponential growth of the plague we are fighting suggests that we cannot wait that long.
5. It is with this in mind that my colleagues and I wish to propose an alternative strategy that would avail Ghana immediately of the needed resources to drastically escalate our readiness and resilience.
6. We humbly appeal to Government to amend the proposed utilization of the $3 billion Eurobond proceeds to make funds available to cater for COVID-19 related expenses and the possible adverse economic shocks that may occur.
7. The proposed utilization plan for the 2020 Eurobond proceeds as originally presented to the Finance Committee of Parliament indicated that the proceeds were tied to three (3) main expenditure items, namely: budget support, restructuring of the energy sector, and liability management. The distribution of the proceeds according to the proposed utilization plan were as follows at the exchange rate of GH¢5.72:
Amount (GHC Mil.) @5.72 exchange rate.
Restructuring of Energy Sector
8. We humbly appeal to government to amend the proposed plan to address the pressing COVID-19 related expenditures and financing gap that is inevitably awaiting us as a result of this pandemic, to keep Ghanaians safe and to safeguard the economy against potential macroeconomic shocks and revenue shortfalls while we await the expected IMF and World Bank Loan in the near future.
9. It is our view that the proposed restructuring of the energy sector does not constitute a priority at this time in the face of a rapid escalation in COVID-19 cases in Ghana. Government may have to consider deferring the planned restructuring of the energy sector to make available one (1) billion United States Dollars, an equivalent of five billion, seven hundred and twenty million Ghana Cedis (GH¢5,720 million) to help fight any further spread of the pandemic.
10. In emergency and pandemic situations, we have what we call “reprogramming” of development projects. We propose a review of the non-urgent expenditure in the 2020 budget. This, when reprogrammed, will release funds to fund the urgent pandemic.
11. Ghana has already recorded a total of fifty two (52) cases and two (2) deaths. These worrying developments require urgent and pragmatic measures to manage and contain the situation. The economic impact of the outbreak is likely to affect almost all sectors of the economy, hence the need for immediate funding to minimize the effects of the outbreak.
12. We hope that Government will view this recommendation favourably and act immediately to ensure that precious Ghanaian lives are saved, and that there can be a rapid restoration of economic activity in the wake of this difficult time. We owe no less to every household and business in this country.
13. May the Good Lord protect us all, God bless our homeland Ghana.