Ken Ofori-Atta highlights four economic benefits of coronavirus pandemic
Ghana’s coronavirus cloud has some economic silver linings, Finance Minister Ken Ofori-Atta has highlighted in parliament.
With economies around the world set to plunge, the safe haven for storing wealth is gold. And here is where Ghana, a gold-producing country, could stand to benefit.
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- Go gold, go
Gold prices have moved from a December 2019 figure of $1,479 per ounce to $1,621 as at March 30, 2020 and it is set to continue its steady climb.
Cocoa however is not showing promise in the pandemic. From $2,404 per metric tonnes in December 2019, it has slumped to $2,253 per metric tonnes as at March 30, 2020, Ken Ofori-Atta said.
- Coronavirus kills importation?
Another area of good news is Ghana’s exchange rate. For years, Ghana has talked about reducing importation as a way of stabilising the cedi.
But what years of talk is yet to accomplish, four months of coronavirus spread has seen a slash in imports especially from China, Ghana’s biggest source of imported goods.
Ken Ofori-Atta observed that a slump in import volumes had played a role in the relative stability of the cedi. But for the full benefit of a decline of importation, exports ought to go up so the country can earn more dollars.
“The jury is still out”, the Finance Minister expressed uncertainty over the net gain of a reduction in imports and an increase in exports.
The Finance Minister also praised the government’s decision to raise $3billion in February which, he said, had helped cushion the country’s currency against exchange rate volatility.
He said in these “apocalyptic times” the Eurobond was “divinely helpful in providing us with the needed buffer.”
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- You could pay less for fuel
He was, however, hopeful that a sharp decline in petroleum prices could benefit consumers at the pump.
There has been a significant decline in petroleum prices, from $62 per barrel in November 2019 to $22.9 per barrel in March.
With Ghana operating a deregulated petroleum sector, a fall in prices is likely to see a fall in the cost of petrol, diesel and other petroleum products
- Time to eat what we grow
The final economic benefit of the pandemic could be seen in the Agricultural sector. Ken Ofori-Atta said the crisis is an opportunity to boost domestic consumption of rice, maize, cassava, chicken.
The Akufo-Addo government’s Planting for Food and Jobs and Rearing for Food and Jobs programmes have helped in producing abundant staple foods. He mentioned rice, maize, cassava, chicken.
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The Finance Minister however warned that if the pandemic continued for long, farmers might hesitate to plant. “A general shortage in food supply is anticipated if the pandemic intensifies,” he said.
He mentioned foods like rice, bread, vegetables, sugar and poultry could become scarce and trigger inflation.
The coronavirus pandemic could be Ghana’s opportunity to trade in food with her West African neighbours, the Minister pointed out.