Business school lecturer, Professor John Gatsi says the Ghana Stabilization Fund has adequate amount of money to deal with the COVID-19 pandemic.
Finance Minister, Ken Ofori-Atta tabled before Parliament Monday 30 March, 2020, requesting for the amendment of the Petroleum Revenue Management Act, to allow a withdrawal from the Ghana Heritage Fund to undertake emergency expenditures in periods of national emergency. There is an estimated US$591.1 million in the Ghana Heritage Fund.
But the Head of Business School at the University of Cape Coast in a write up said “With the new proposal, to cap the Stabilization fund at US$100Million, it means automatically US$288.60 million is available to finance the Coronavirus Alleviation Program.
“Using today’s exchange rate of GHS5.70, this will be GHS1.65 billion to cater for the COVID-19.
“Also, if the Stabilization fund withdrawal allow for 70% withdrawal from the US$100 million that will be US$70 million. A US dollar which is equivalent to GHS5.70 will give you GHS399 million”, he explained.
At the end of 2019, the Stabilization fund accumulated US$388.60 million.
Explaining further, Professor Gatsi said since no amount has ever been withdrawn from the Heritage fund unlike the Stabilization fund, it currently accumulates more than the Stabilization fund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$579.61 million. So, at today’s exchange rate, a total of GHS3.3 billion will be available.
“Since the Heritage fund receives the least amount of petroleum revenue, it is only past disciplined fiscal behavior 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 adequate amount of money to deal with the COVID-19 and shortfall in the ABFA”, he concluded.