Question

The novel corona virus disease (also known as COVID – 19) which started in WUHAN in December 2019 has grounded the global economy to a halt. World crude prices reached their lowest and trade among nations have generally slowed. Production has slowed and jobs are being lost across the globe. Globally, over seven million people have contracted the virus and over four hundred thousand have died. Ghana announced its first two confirmed cases of COVID – 19 on 12 March, 2020 and as at June 14, 2020, the number of confirmed cases stood at 11,964 with 54 deaths. The impact of the COVID – 19 pandemic on Ghanaian economy and the global economy at large is predicted to be very severe. The government of Ghana, like many other governments, is spending more funds on containing the pandemic and limiting the effect of the pandemic on the economy. The IMF Executive Board approved the disbursement of US$1 billion drawn under the Rapid Credit Facility (RCF) for Ghana on April 13, 2020 after receiving application from the country’s government. Given this background, briefly discuss the repercussions of the corona virus pandemic for the Ghanaian economy and foreign exchange market. Suggest ways of mitigating the effects of covid – 19 on Ghana’s balance of payments (BOP)

Answer 1

Yes it is true that the covid-19 affected the complete world.
There is a complete loss of productive activities a downfall in the production and highly withdrawal of the jobs.
The organisations are not in a position to provide the job securities to their employees because in
this situation it is very difficult to provide the opportunities working now everyone is looking for the survival every Global company in the world is looking for a substitute in this situation there is a chance of massive unemployment in all the economies.
Ghana is not a developed country to handle this type of situations and this is the only reason the
Ghana uses the Rapid credit facility of 1 billion dollar from IMF because the economy of Ghana is not sufficient to handle this type of situations where the productivity is completely lost.
The foreign exchange and the balance of payment situation of the Ghana adversely affected by the
covid-19 it is not possible to maintain the stable currency exchange rate and it is also not possible to manage the balance of payment in a proper way means to maintain the export and import stability.
Therefore the effect of covid-19 is very adverse in this type of economy where balance of payment and foreign exchange rate please are significant role.