Back timelines for economic recovery with data – Gasti to Ofori Atta

An Economist at the University of Cape Coast, Professor John Gatsi, has asked the Finance Minister, Ken Ofori Atta to provide credible data to support the timelines he has given for the recovery of the Ghanaian economy against the coronavirus pandemic.

Prof Gasti said the issue of science and data have become necessary in dealing with the impact of the COVID-19 on the economy.

Mr. Ofori-Atta recently told the Financial Times that it may take up to three years for the economy to recover from the impact of the coronavirus (COVID-19) pandemic,.

“A U-shaped recovery is touted, but ours will likely be a steep drop, then a two- to three-year downward slide before a recovery; a trapezoid-shaped recovery!,” he said.

But speaking on TV3’s Mid Day news Friday May 8, Prof Gatsi said : “Generally, it is a difficult task but we can also appreciate the fact that because of uncertainties around the Covid 19, issues will be unfolding, so, we should not be surprised if he comes out today and say that upon reflection and collecting more data , I (Finance Minister) think that the economy will come back on track in two years or five years.

“So the whole thing depends on the development of new issues as it comes to the attention of the finance Minister and the government.

“But, he should be in the position to provide reasons and data especially as data issue have become very important. In terms of managing the covid-19, it depends on the macro fiscal data that we have been presenting in the past three years and what we are presenting to the IMF.

“So whatever he is going to say whether he is going to maintain the three years or reduce it or extend it should be predicated on solid credible data.”

Regarding the assessment of the impact of the COVID-19 on the economy, Prof Gatsi said the three-day assessment plan by the government is a step in the right direction.

He said the government, through this assessment is fulfilling a legal requirement because the Public Fiscal Management Act requires that by close of May, an update should be provided on the implementation of the fiscal strategic document.

On Thursday at a press briefing in Accra the Minister of Information, Kojo Oppong Nkrumah has announced he government has started a three-day retreat to examine data gathered on the impact of the novel coronavirus on all sectors of the economy and proffer measures to return the economy back to its previous state,

Mr Nkrumah said the President has directed all ministers to examine the impact of the virus on their respective sectors and provide recommendations on how to bring these sectors back on track.

“The President has instructed all ministers to report on the impact on their sectors and proffer recommendations for recovery at the 3-day retreat”, he said.

The minister said the cabinet will then commence a process of examining data so far gathered on the impact of the COVID-19 across the governance sectors in the country and have a better understanding of its impact on all sectors of the economy.

“In addition, the retreat will give the government the opportunity to put together information for the 2020 mid-year budget review”, he added.

The government has earmarked GHS600million stimulus package to assist small and medium scale enterprises (SMEs) in the wake of the COVID-19.

Prof Gatsi said: “It is important because it is required by law.

“If you go the Public Financial Management Act, it is required that by the close of May the government should provide certain updates regarding the fiscal strategic document.

“Within that fiscal strategic document the government is required to provide progress reports about the management of the economy, provide update regarding revenue mobilsation, update regarding the wage bill to revenue, update regarding public debt to GDP, updates regarding other macro fiscal indicators.”

He added : “In that requirement the government is supposed to provide reasons for the deviations and the risks to the economy going forward so I believe that is exactly what the government is doing.”