Additional thought on coronavirus and heritage fund - Prof. John Gatsi

At the end of 2019, the Stabilization fund accumulated $388.60Million.

With the new proposal, to cap the Stabilization fund at $100Million, it means automatically $288.60Million is available to finance the Coronavirus Alleviation Program. Using today’s exchange rate of ghc5.70, this will be ghc1.65Billion to cater for the COVID-19.

Also if the Stabilization fund withdrawal allows for 70% withdrawal from the $100Million that will be $70Million*ghc5.70 to get ghc399Million.

The total possible amount that the government can get from the Stabilization fund without adding 2020 first quarter of petroleum revenue is ghc2.049Billion.

Why attracted to the Heritage Fund?

Since no amount has ever been withdrawn from the Heritage fund unlike the Stabilization fund, it currently accumulates more than the Stabilization fund

At the end of 2019, the Heritage fund accumulated US$ 579.61Million so at today’s exchange rate a total of ghc3.3Billion will be available.

Since the Heritage fund receives the least amount of petroleum revenue, it is only past disciplined fiscal behaviour and adherence to the law that helped to accumulate this attractive amount. It will take the same discipline and adherence to the law to grow the Heritage fund further.

From the above, it is clear that apart from the prohibition of the law and inability to put together 75% members of parliament to change the law, the Stabilization fund has an adequate amount of money deal with the COVID-19 and shortfall in the ABFA.