Overview
Ghana registered the first confirmed COVID-19 case on March 14, 2020. Starting March 16, the government adopted sweeping social distancing measures and travel restrictions to avert an outbreak, including (i) suspension of all public gatherings exceeding 25 people for four weeks; (ii) closure of all universities and schools until further notice; and (iii) mandatory 14-day self-quarantine for any Ghanaian resident who has been to a country with at least 200 confirmed cases of COVID-19, within the last 14 days. On March 23, Ghana closed all its borders to travelers. On March 30, a partial lockdown of major urban areas was implemented. As an oil exporter, Ghana was significantly affected by the volatility in oil prices.
Reopening of the economy. The partial lockdown was lifted on April 23 following expansion of treatment and isolation centers, enhanced testing and contact tracing capacity, increased capacity to produce sanitizers and medicines, and the severe impact of the lockdown on the most vulnerable. Phase One of the process of easing restrictions began on June 5. Provided social distancing restrictions were met, religious services for fewer than 100 congregants were allowed, and schools and universities re-opened so that older students could resume classes ahead of exams. Phase Two started on August 1, lifting restrictions on the number of congregants for religious services and opening tourist sites. However, beaches, pubs, cinemas and nightclubs remain closed. International flights resumed from September 1, subject to enhanced COVID-19 protocols.
New restrictions. Due to rising cases during the second wave, some measures were reintroduced on January 31, 2021, including restrictions on large gatherings and sporting events, restaurants operating on take-away basis only, and increasing the number of shifts and telework in workplaces as possible. COVID-19 tests will be free for Ghanaian citizens. Beaches, pubs, cinemas and nightclubs remain shut down, and land and sea borders continue closed for human traffic. The second wave started to abate in March, and by early June confirmed daily cases averaged around 40.
Vaccination. Ghana was the first country in Africa to receive the COVAX vaccines at the end of February 2021. The vaccination campaign started on March 1, 2021 with the President receiving his shot.
COVID-19 Restrictions
Movement Restrictions
- Is a curfew in place? No.
- Are there restrictions on intercity or interstate travel? No.
- Domestic airplanes, taxis, and buses are permitted to operate at full capacity. Face coverings are required in public.
Transportation Options
- Are commercial flights operating? Yes.
- Accra Kotoka International Airport is open for regular international passenger travel. Ghana’s land and sea borders remain closed until further notice.
- Is public transportation operating? Yes.
- Domestic airplanes, taxis, and buses are operating at full capacity. Face coverings are required in public.
Fines for Non-Compliance
- Not wearing a face covering in public could result in a fine of 12,000 to 60,000 cedis, and/or a prison sentence of four to ten years.
Economic Measures
Key Policy Responses as of June 3, 2021
FISCAL
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In 2020, the government spent about 2.1 percent of GDP of which 0.3 percent of GDP for healthcare. The bulk of these funds were used under the Coronavirus Alleviation Programme to face the social and economic consequences of the pandemic, including support selected industries (e.g., pharmaceutical sector supplying COVID-19 drugs and equipment), support SMEs, finance guarantees and first-loss instruments, build or upgrade 100 district and regional hospitals, and address availability of test kits, pharmaceuticals, equipment, and bed capacity. For 2021, the government has budgeted 1 percent of GDP under the COVID-19 Alleviation and Revitalization Enterprise Support (CARES)of which health care spending amounts 0.7 percent of GDP including vaccination campaign of about $205 million.
In 2020, to compensate for larger spending related to the COVID-19 crisis, the government plans to cut spending in goods and services, transfers, and capital investment (also reflecting the lower absorption capacity due to the pandemic), for a total of at least GHc 1.1 billion (0.3 percent of GDP).In addition, the government has agreed with investors to postpone interest payment on non-marketable domestic bonds held by public institutions to fund the financial sector clean-up for about GHc 1.2 billion (0.3 percent of GDP). The government has also drawn US$218 million from the stabilization fund, and will borrow up to GHc 10 billion from the Bank of Ghana.
In 2021, government introduced new taxes measures combined with tax administration of about 0.9 percent of GDP to face the recovery spending while initiating fiscal consolidation. Finally, to meet its large financing needs, the government issued its first post COVID Eurobond of $3 billion at an average rate of 8 percent in March.
MONETARY AND MACRO-FINANCIAL
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The Monetary Policy Committee (MPC) cut the policy rate cut by 150 basis points to 14.5 percent on March 18, 2020, and announced several measures to mitigate the impact of the pandemic shock, including lowering the primary reserve requirement from 10 to 8 percent, lowering the capital conservation buffer from 3 to 1.5 percent, revising provisioning and classification rules for specific loan categories, and steps to facilitate and lower the cost of mobile payments. The committee also signaled it would continue to monitor the economic impact of COVID-19 and take additional measures if necessary. A 10-year government bond with a face value of GHc 10 billion (2.6 percent of GDP) has been purchased by the Bank of Ghana.
The MPC again lowered the policy rate by 100 basis points to 13.5 percent on May 31, 2021, noting that risks to the inflation outlook appeared muted in the near-term.
