Ghana slashes GDP forecast over coronavirus shock

Ghana's finance ministry has slashed its 2020 GDP growth forecast from 6.8% to 1.5% due to the coronavirus pandemic, a rate that would represent the Ghanaian economy's worst performance in nearly four decades. In recent years the oil, gold and cocoa-producer has had one of the top ten fastest-growing economies in Africa. The International Monetary Fund forecast average growth of 5% in the near term following its successful completion of an IMF programme last year.

Finance Minister Ken Ofori-Atta said the new growth forecast of 1.5% could be further lowered if the country goes into full lockdown to curb the spread of the virus, which has so far infected 152 in Ghana and killed five. "Never before, in the history of the Fourth Republic, has the entire Ghanaian economy and society experienced such (a) severe external shock," Ofori-Atta told lawmakers in a speech whose text was published late on Monday.

Authorities have imposed a two-week lockdown in the capital Accra and the city of Kumasi, which are the worst-affected areas as well as being Ghana's main economic hubs. They have also closed all borders and schools and banned mass gatherings. A 50% slump in the global oil price partly due to coronavirus means the government forecasts a near $1 billion shortfall in oil revenue this year as well as lower tax revenues and import duties, Ofori-Atta said.

Seeking to cushion the Ghanaian economy, the central bank has cut interest rates, while the government has asked the IMF for around $550 million in emergency funding. In addition, Ofori-Atta asked lawmakers to allow the ministry to fund a Coronavirus Alleviation Programme with 1.25 billion Ghanaian cedi ($219 million) from Ghana's stabilisation fund. Interest rate payments on non-marketable bonds will be deferred, he said.

Last week the IMF said around 80 countries had requested emergency loans from a $50 billion facility. It warned that the spread of coronavirus into sub-Saharan African would severely disrupt livelihoods, tighten financial conditions, reduce trade and investment and cause a steep drop in commodity prices. ($1 = 5.7100 Ghanian cedi)

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