COVID-19: Bank of Ghana hands over GHC10bn to gov’t to close fiscal gap
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COVID-19: Bank of Ghana hands over GHC10bn to gov’t to close fiscal gap

- The Bank of Ghana has given GHC10 billion to the government to help close Ghana's fiscal gap

- The support was paused after Ghana entered into an Extended Credit Facility (ECF) programme with the International Monetary Fund (IMF)

- It was, however, resumed after the outbreak of the coronavirus led to a widening of the budget deficit from 4.7% to 7.8% of Gross Domestic Product

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The Bank of Ghana (BoG) has reportedly supported the government with GHC10 billion to help close Ghana’s deficit gap.

YEN.com.gh understands that the Central Bank halted support for the government after Ghana entered into an Extended Credit Facility (ECF) programme with the International Monetary Fund (IMF).

It, however, resumed after the outbreak of the coronavirus led to a widening of the budget deficit from 4.7% to 7.8% of Gross Domestic Product (GDP).

READ ALSO: Report shows Ghanaians are losing interest in foreign accounts due to cedi's strength

Per a report by Business and Financial Times, a provisional Quarter One report on the economy published by the BoG shows the deficit has stretched to 3.4% from a target of 1.9% of GDP.

This was traced to shortfalls in tax revenues from international trade, taxes on goods and services, and spending on some unbudgeted COVID-19-related expenditure.

The Governor of BoG, Dr. Ernest Addison, explained that the emergency funding provisions were triggered in line with Section 30 of the Bank of Ghana Act 2002 (Act 612) to purchase a government of Ghana COVID-19 relief bond with a face value of GH¢5.5billion at the monetary policy rate with a 10-year tenure and a moratorium of 2 years.

The Minister of Finance, Ken Ofori-Atta, is reported to have stated that the the deficit will increase from the programmed GH¢18.9 billion to GH¢30.2 billion, the variance equivalent to 2.9% of GDP.

The primary balance will also worsen from a surplus of GH¢2.8 billion to a deficit of GH¢5.6 billion, representing 1.4% of GDP, he added.

Meanwhile, a new report from the Bank of Ghana (BoG) shows that Ghana’s debt stock increased by GHC16.9 billion between January and March 2020.

The 2020 Quarter 1 results were part of a Summary of Economic and Financial Data released by the Central Bank.

The Report shows that Ghana's total debt stock as of March 2020 was GHC236.1 billion, which is 59.3% of the Gross Domestic Product (GDP).

READ ALSO: Ghana's economy could not withstand partial lockdown beyond 3 weeks - Ofori-Atta

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Source: Yen

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