Mr Ken Ofori-Atta, the Minister of Finance, said the COVID-19 outbreak is posing significant challenges to the economy, eroding the gains made for growth and jobs in the previous years.

He said sectors such as the hotel and hospitality industry, foreign direct investment, trade and industry, agriculture, health, transportation, manufacturing, real estate, financial, and education were heavily impacted.

Mr Ofori-Atta, who was presenting the 2020, mid-year review budget to Parliament, said households and businesses had equally been hit with significant job losses and reduced incomes.

“Collectively, 1,531 job losses were recorded between April to June 2020 from eight companies within the Ceramics, Timber, Food and Agro-processing industries in the manufacturing sub-sector,” he said.

He said disruptions in the global supply chain, reduction in demand, low productivity, high recurrent expenditure, and low revenue turnover have combined to impact the operations within the manufacturing sub-sector.

To this end, the Finance Minister said in some institutions the entire workforce was either asked to stay home or downsized to accommodate social distancing protocols while in other instances, salary cuts were instituted to enable factories to survive.

He said the combined effect of these developments led to a revenue shortfall of GH¢13.6 billion and unanticipated expenditures of approximately GH¢11.7 billion.

“This will result in a projected fiscal deficit of 11.4 percent of GDP. This is above the five percent limit as stated in the Fiscal Responsibility Act, 2018,” he said.

Mr Ofori-Atta said the economic shock of the pandemic had manifested through external trade disruptions and decline in commodity prices particularly oil whose prices have fallen by more than half, and tightening of global financial markets.

“The Ghana cedi, after appreciating strongly against the three major currencies in the first quarter of 2020, came under pressure, depreciating against the US dollar in April and May”.

He stated that the cedi further depreciated by 2.4 percent against the dollar and the euro in June 2020.

Inflation, Mr Ofori-Atta said also inched up by 2.8 percentage points to 10.6 percent in April and further to 11.3 percent in May and moderated to 11.2 percent in June.

The Finance Minister said the projected real Growth Domestic Product growth for 2020 had been revised considerably downwards from 6.8 percent to 0.9 percent.

“It is only the solid foundation established by the Government and the resilient buffers built by the Bank of Ghana that has saved the economy from contracting, as have happened in many countries,” he said.

Mr Ofori-Atta said COVID-19 had also led to disruption in corporate and general business confidence, with threats to projected revenues, profitability, liquidity and corporate growth.

He said 19 out of the 28 State-owned Enterprises were projecting losses up to GH¢1.55 billion for 2020.