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Proposal to spend Heritage Fund stirs debate

Parliament approves COVID-19 National Trust Fund Bill

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News/Editorial EDITORIAL: GNPC FACES UPHILL TASK 1

Wash your hands 2

The sharp decline in crude oil price from US$60 dollars per barrel few months ago to under US$ 30 is expected to significantly impact the planned operations of the Ghana National Petroleum Corporation (GNPC) The Ghana National Petroleum Corporation (GNPC) is faced with a massive revenue cut as a result of the drastic reduction in crude oil prices, and experts have predicted

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LIMITED Copyright @ 2019 Business24 Limited. All Rights Reserved. Editorial Team Dominic Andoh: Editor Eugene Kwabena Davis (Head of Parliamentary Business & Commodities) Benson Afful (Head of Energy & Education) Patrick Paintsil (Head of Maritime & Banking) Nii Annerquaye Abbey (Online Editor) Marketing Alexander Lartey Agyemang (Business Development Manager) Ruth Fosua Tetteh (Dept. Business Development Manager) Gifty Mensah (Marketing Manager) Irene Mottey (Sales Manager) Edna Eyram Swatson (Special Projects Manager ) Events Evelyn Kanyoke (Snr. Events Consultant) Finance/Administration Joseph Ackon Bissue (Accountant)

Paa Kwesi Anamua Sakyi of the IES, “some projects would either have to be delayed, suspended or cancelled,” and may force GNPC’s hand to give away some of its participating interest in fields. Dr. Steve Manteaw former chairman of the Public Interest and Accountability Committee (PIAC), the petroleum revenue watchdog, also notes that the cash flow constraint may be compelled to borrow, warning, however, that this would be risky and increase the

company’s exposure. Given these dynamics, Business24 will call on the corporation to maximize its allocated funds. This paper also believes that given the strategic importance of the GNPC, it ought to be supported in other ways to ensure the country doesn’t lose precious participating interests in oil fields.

Proposal to spend Heritage Fund stirs debate BY DOMINICK ANDOH

Cover your cough

that the company may be compelled to seek external funding. Given the fall in crude prices, the government will register a shortfall in crude oil receipts amounting to GH¢5.7 billion. The shortfall will lead to a reduction in transfers to GNPC by GH¢642 million, nearly 40 percent of the national oil company’s original budgetary allocation of GH¢1.7 billion. The impact of this shortfall is likely to be that, in the words of

Finance Minister Ken Ofori-Atta has stirred a debate with his request to Parliament to tap the Ghana Heritage Fund (GHF) to help bridge the fiscal gap created by the coronavirus (COVID-19) pandemic. The Minister on Monday asked the 275-member legislature to amend the Petroleum Revenue Management Act (PRMA), among a raft of other requests, to allow a withdrawal of part of the estimated US$591.1 million in the GHF to undertake emergency expenditures related to the pandemic. The PRMA currently prohibits the use of the GHF, which was set up to accumulate petroleum revenue savings that will serve as an endowment for future generations upon the depletion of Ghana’s petroleum reserves.

Parliament is, however, allowed, through a resolution backed by a majority of members, to authorise the use of a portion of the Fund’s accumulated interest, but this can only be done in the year 2026 and at subsequent fifteen-year intervals. While some analysts have cautioned against utilising monies from the Fund, citing what they consider to be sound legal prohibitions, others believe the exigencies of the time require an amendment to the PRMA to allow for usage of the Fund. “It is clear that the object and timing of the Heritage Fund does not allow for any utilisation under the present circumstances. Any use of majority strength in Parliament to rope in the Heritage Fund defeats the fine arrangement which serves current fiscal interest [and] public expenditure interest in times of huge petroleum revenue loss and inter-

Parliament approves COVID-19 National Trust Fund Bill BY EUGENE DAVIS

Parliament on Thursday approved by consensus the COVID-19 National Trust Fund Bill, 2020. The Act is meant to establish a Fund to properly receive and regulate donations toward the fight against the coronavirus pandemic and to support the most vulnerable in the country. According to the Report of the Committee on Constitutional, Legal and Parliamentary Affairs on the COVID-19 Trust Fund Bill, 2020, it would be funded from three main sources The first, the report notes, would be donations, gifts and other voluntary contributions

by individuals, groups and corporate bodies. The other sources are: monies that may become lawfully due to the Fund and other monies that the Board of Trustees of the Fund may determine in consultation with the Minister for Finance. Monies accruing to the Fund would be paid into a bank account to be opened for the Fund. A Board of Trustees, recently appointed by the President, will manage the Fund. Membership of the Board, chaired by former Chief Justice, Sophia Akuffo, include: Archbishop Justice Ofei Akrofi, Mr Jude Kofi Bucknor, Gifty Afenyi-Dadzie, Mrs. Elsie Addo-Awadzie, Dr. Ernest Ofori-Sarpong and Dr Tanko. Mr Collins Asare is Secretary to the Board.

generational protection,” said Prof. John Gatsi, Dean of the University of Cape Coast Business School. “Government has factored both the Stabilisation and Heritage Funds into the foreign reserves, and any undue withdrawal may undermine their role in [the] reserve position of the country. Parliament is hereby called upon to maintain fiscal discipline principles by ensuring that we do not consume all we have just because of the coronavirus.” Prof. Peter Quartey, Director of the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, however, believes the fiscal threat posed by COVID-19 necessitates the usage of the Heritage Fund. He argued that the situation merits the use of the Heritage Fund, among others, to deal with the economic and fiscal impact of the COVID-19 pandemic.

Other measures proposed by Mr. Ofori-Atta to mitigate the impact of the pandemic include lowering the cap on the Ghana Stabilisation Fund (GSF) from the current US$300 million to US$100 million to enable government use the excess amount and arranging with the Bank of Ghana to defer interest payments on non-marketable instruments, estimated at GH¢1.22 billion to 2022 and beyond. The government has also proposed to adjust expenditures on goods and services and capital outlays downwards by GH¢1.25 billion, secure about US$1 billion in financing from the World Bank and International Monetary Fund (IMF), and cut the budgetary allocation to the Ghana National Petroleum Corporation (GNPC) by almost 40 percent. The expenditure adjustments will help narrow a fiscal gap due to COVID-19 of GH¢11.4 billion (2.9 percent of GDP).

Lean times confront GNPC CONTINUED FROM PAGE 1

for Energy Security (IES), Paa Kwesi Anamua Sakyi, said it will result in cash flow constraints for the company, affecting its investment projects and goals for the year. “Some projects would either have to be delayed, suspended or cancelled,” said Mr. Sakyi, adding that inadequate cash flow may result in GNPC giving away some of its participating interest in fields. “If GNPC is unable to meet its financial obligations to, let’s say, operating partners, it might not be able to lift its share of petroleum or crude produced.” To minimise the cash flow constraints, the two experts said GNPC may be com-

pelled to borrow, warning, however, that this would be risky and increase the company’s exposure. Any such borrowing would require parliamentary approval, Dr. Manteaw stated. The upstream petroleum sector, which accounts for about 7 percent of the government’s total revenue, is seeing challenging times not just due to lower oil prices, but also because of reduced production levels by Tullow Oil, operator of Jubilee, Ghana’s first oil field. The lower anticipated revenue for 2020 has also led to reductions in budget expenditures and transfers to the Ghana Stabilisation and Heritage funds.

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Keeping global food chains alive is crucial amid COVID-19 crisis- FAO BY KWASI ANKU Mr. QU Dongyu, the DirectorGeneral of the Food and Agriculture Organization (FAO) had said the COVID-19 pandemic is putting enormous strains on the public health systems around the world. He said millions of people in the world’s most advanced economies are in some form of quarantine and “We know the human toll will be high, and that massive efforts to turn the tide carry a heavy economic cost.” The Director-General said to reduce the risk of an even greater toll on shortage of food for millions, even in affluent countries, the world must take immediate action to minimise disruptions to food supply chains. He said a globally coordinated and coherent response was needed to prevent this public health crisis from triggering a food crisis in which people could not find or afford food. “For now, COVID-19 has not entailed any strain on food security, despite anecdotal reports of crowded supermarket sieges,” he said. He said while there was no need for panic, there was enough supply of food in the world to feed everyone, “we must face the challenge, an

enormous risk that food may not be made available where it is needed.” The COVID-19 outbreak, with all the accompanying closures and lockdowns, has created logistical bottlenecks that ricochet across the long value chains of the modern global economy. He said the restrictions of movement, as well as basic aversion behavior by workers, may impede farmers from farming and food processors-who handle most agricultural products--from processing. Mr. Qu said shortage of fertilizers, veterinary medicines and other input could also affect agricultural production. “Closures of restaurants

and less frequent grocery shopping diminish demand for fresh produce and fisheries products, affecting producers and suppliers, especially smallholder farmers, with long-term consequences for the world’s increasingly urbanized population, be they in Manhattan or Manila,” he said.. He said uncertainty about food availability can induce policymakers to implement trade restrictive measures in order to safeguard national food security. “Given the experience of the 2007-2008 global food price crisis, we know that such measures can only exacerbate the situation,” he added. Export restrictions put in

place by exporting countries to increase food availability domestically could lead to serious disruptions in the world food market, resulting in price spikes and increased price volatility. In 2007-2008, these immediate measures proved extremely damaging, especially for low income food deficit countries and to the efforts of humanitarian organizations to procure supplies for the needy and vulnerable. The Director-General said countries should all learn from the recent past and not make the same mistakes twice and policy makers must take care to avoid accidentally tightening food-supply conditions. He said while every country facing its own challenges, collaboration between governments and the full gamut of sectors and stakeholders was paramount, indicating that “we are experiencing a global problem that requires a global response.’ Mr. Qu said countries must ensure that food markets are functioning properly and that information on prices, production, consumption and stocks of food was available to all in real time. The approach will reduce

uncertainty and allow producers, consumers, traders and processors to make informed decisions and to contain unwarranted panic behavior in global food markets. He said the health impacts of the unfolding COVID-19 pandemic on some of the poorest countries were still unknown, yet, ‘we can say with certainty that any ensuing food crisis as a result of poor policy making will be a humanitarian disaster that we can avert.’ Already, 113 million people experience acute hunger. In sub-Saharan Africa, a quarter of the population is undernourished and any disruptions to food supply chains will intensify both human suffering and the challenge of reducing hunger around the world. The Director-General said countries must do everything possible to not let that happen, as prevention costs less. “Global markets are critical for smoothening supply and demand shocks across countries and regions, and we need to work together to ensure that disruptions of food supply chains are minimized as much as possible. COVID-19 forcefully reminds us that solidarity is not charity, but common sense,” he added.

Relief for distressed private businesses …..as Corporate Insolvency Act gets legal approval BY EUGENE DAVIS The Corporate Insolvency Bill 2019, which has just been passed into an Act by Parliament, is expected to provide some relief for distressed private businesses. The new Act offers distressed companies with good prospects another opportunity to restart operations, while providing the framework for closing and transferring assets of failed businesses. “Companies with good prospects must be given the opportunity to start afresh when they are on the brink of no longer being going concerns” a Parliamentary report has revealed. According to a memorandum accompanying the Bill, the primary object of the Act is to raise the present standard of business ethics and to promote private enterprise in Ghana. The Act, which is awaiting Presidential assent, facilitates the access to timely, efficient and impartial insolvency

proceedings. More so, there is a reduction of the burden of insolvency through higher and equitable distribution of assets of a company to creditors. The Act also spells out that the administration of business, property and affairs of company in a manner that provides an opportunity for the company or as much as possible of its business, to continue as a going concern [assumes that the business will remain in existence long enough for all the assets of the business to be fully utilized]. It also provides for the temporary management of the affairs, business and properties of the distressed company, places a temporary freeze on the rights of creditors and other claimants against the company. Additionally, it allows the development and implementation of a restructuring plan which results in a better return for the creditors and shareholders of the company than would result from the immediate

winding-up of the company. The Act seeks to provide for a statutory restructuring procedure to assist companies to remain as going concerns, re-enact the Bodies Corporate (Official Liquidations) Act,1963 (Act 180) to incorporate an enhanced dimension of the liquidation of companies and the regulation of insolvency practitioners to ensure

that there is appropriate oversight of private insolvency practitioners for the proper administration of insolvency proceedings, accountability and efficiency. The Bill seeks to promote private enterprise in Ghana. It also forms part of the processes of legal reform initiated by the Ministry of Justice and is aimed at improving the

quality of the legal regime for corporate bodies and their administration when they become insolvent. Background The passage of the Insolvency Act, 2006 (Act 708) established a comprehensive legal framework for personal insolvency matters. Even though there appears to be some piecemeal efforts to address issues related to the administration of insolvent companies, there is no comprehensive piece of legislation that addresses these issues holistically. For example, the Insurance Act, 2006 (Act 724) and the Banks and Specialised Deposit-Taking Institutions Act, 2016 (Act 930) contain some provisions on the administration of corporate entities in distress and their administration. The current regime is emphatic on liquidations and receiverships but lacks the provision for corporate restructuring to provide a range of solutions for distressed but viable companies.

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COVID-19: US$35m World Bank facility approved by Parliament BY EUGENE DAVIS Parliament has approved a US$35million World Bank facility for Ghana’s COVID-19 Emergency Preparedness and Response Project. The expected project beneficiaries include: risk populations, infected people, medical, paramedical and emergency personnel, medical, quarantine and testing facilities and health agencies in the public, non-state and private sector. The interventions to be implemented under the Ghana COVID-19 Emergency Preparedness and Response Project are expected to enhance control measures to halt further infections, loss of life and mitigate the negative economic impact as a result of the outbreak. It will also upgrade national response capacity by improving access to health services, safeguarding people against the epidemic, strengthening disease surveillance and anchoring other public heaalth interventions, improved national forecasting , prevention and preparedness requirements of infrastructure (reference labs, clinical capacity), equipment, reagents and commodities with trained local capacities embedded in national human and animal health sys-

tems. This was contained in the Report of the Finance Committee on the Finance Agreement between Government of Ghana and the International Development Association for an amount of Twenty-five million, five hundred thousand Special Drawing Rights(SDR25,500)[Equivalent to US$35 million] to finance the Ghana COVID-19 Emergency Preparedness and Response Project. The project has four main components: component 1 deals with Emergency COVID-19 Response with us $21.5m earmarked. Under this, there is sub-component which deals with case detection, confirmation, contract tracing, recording and reporting (US$4.5m). This sub-component seeks to strengthen disease surveillance systems at points of entry, public health laboratories and epidemiological capacity for early detection and confirmation cases, combine detection of new cases with active contact tracing, support epidemiological investigation, strengthen risk assessment and provide on-time data and information for guiding decision-making and response and mitigation activities. An amount of US$12.7m has also been set aside for Containment, Isolation and Treatment

in this sub-component, with the focus expected to support the leasing, renting, establishment and refurbishing of designated facilities and centres to contain and treat infected cases in a timely manner. Others include Social and Financial Support to Households as well as Health System Strengthening. Under Component 2, it involves the Strengthening of Multi-Sector National Institutions and Platforms for Policy Development and Coordination of Prevention and Preparedness using “One Health”approach, with US$3.4m earmarked. The focus of this component will be to provide technical support for strengthening governance and updating policies and plans, support for institutional and organizational restructuring to respond to emergencies such as pandemic diseases and contracts for private management of newly established infectious disease centres and medical villages. Support would also be provided to develop standardized life insurance package, overtime and hazard payment, which are to be made available for those directly involved in surveillance and case management. The component would also support enhancing diseases information systems through

development of a disease surveillance information system. Furthermore, the report also highlights Community Engagement and Risk Communication under Component 3, with US$7.4m earmarked. This component will address the risk communication and community engagement needs of the project. Emphasis will be placed on both the process and development of broadcast communication support materials including billboards , printing of leaflets and pocket cards, epidemiological bulletins, TV documentaries and payment for broadcast of ‘informercials’, civic education and faith-based organization engagements. There is also the Implementation Management, Monitoring and Evaluation and Project Management with US$2.7m earmarked under Component 4. The Project Management activities will include the recruitment of additional staff/ consultants responsible for overall administration, procurement and financial management under the project and the financing of project coordination activities. With respect to Monitoring and Evaluation, the activities include training in participatory monitoring and evaluation at all administrative levels, the development of an action

plan for monitoring and evaluation, carrying out an impact evaluation on quantitative and qualitative aspects of the project interventions, including the collection of qualitative information through site-visit interviews, focus groups and respondent surveys. The report also indicated that the World Bank has created a dedicated COVID-19 FAST Track Facility, Government had prepared a Ghana COVID-19 Emergency Preparedness and Response Project. This project is underpinned by the EPRP which is informed by an assessment of the challenges in the national health emergency eco-system and inspired by the lessons of the last Ebola outbreak in West Africa in 2014-2015. Additionally, the project is in alignment with the national Action Plan for Health Security(NAPHS 2020-2025) being developed to address health emergencies under the “One Health” framework. It is a comprehensive scheme to build resilience within the health and other allied sectors for emergency preparedness and response. It is thus part of the bigger Emergency Preparedness and Response Plan(EPRP) being implemented by government.

Gov’t struggling to raise remaining $65m for COVID-19 fight– Minority The Minority Caucus in Parliament says government will struggle to raise the remaining US$65million to shore up the World Bank and IMF loan facility of US$35million to fight the spread of the coronavirus (COVID-19) in Ghana. Parliament on Wednesday, April 1, 2020, approved a World Bank and IMF loan facility of US$35million brought before it by government to enable it combat the spread of the COVID-19. The amount represents 35% out of the US$100million announced by President Nana Addo Dankwa Akufo-Addo, as having been earmarked to contain the spread of the coronavirus, leaving a funding gap of US$65million (65%). In the view of the Minority, they are completely at a lost as to why government is yet to furnish Parliament with details as to how it is going bridge the funding gap of US$65million considering the fact that Parliament will rise on Saturday, April 4, 2020. Deputy Minority Leader, Mr. James Klutse Avedzi, who

interacted with members of the Parliamentary Press Corps on the sidelines of Parliamentary sitting on Thursday, April 2, 2020, said it was important for government, represented by the Minister for Finance, to appear before Parliament with details over how government was going to raise the additional US$65million. “On Thursday, April 1, 2020, Parliament approved an amount of US$35million from the World Bank and the IMF. Now, if you take the US$35million from the proposed US$100million, there is a gap of US$65million. As we speak, where government is going to raise the US$65million we all don’t know. “Government is now struggling to get the US$100million and as at yesterday, US$35million was approved by the House. So, we are calling on the government to come out and tell us where they are going to raise the remaining US$65million because it is very important that we all get the money in order for the government

to fight the pandemic,” Mr. Avedzi said. GARID to the rescue? Government has indicated that it intends to use part of the Greater Accra Resilient & Integrated Development (GARID) loan facility approved by the House to bridge the funding gap. However, Mr. Avedzi who is also the National Democratic

Congress (NDC) Member of Parliament (MP) for Ketu North, further said should that intention be true, it will be appropriate for the Minister for Finance to furnish Parliament with details on how “they will go about it”. “GARID is a loan facility that the House approved for a project here in Accra. Now if they want to borrow that money from GARID, we want to know how they will go

about it,” he said. He further questioned why of the US$35million approved so far for the COVID-19 fight, only US$700,000 has been earmarked to support households. He argues that of the US$35million approved by the House, “one of the four components was support to the households. You could see clearly that whilst they are projecting US$7million for contact tracing and all those issues, only US$700,000 is a budget that they have allocated to support households. We all know that there are people who live on daily income. Now they are all at home, how do they survive?” He added that: “By budgeting or allocating only US$700,000 which is equivalent to GHC 4million for the households, how will you reach the households? That is what we want the government to also come clear and why have they only allocated US$700,000 to support the households while allocating US$7million for contact tracing and those issues?”

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Ensuring Business Continuity amid the COVID-19 Pandemic BY GNCCI The outbreak of the novel corona virus disease (COVID-19) has disrupted every aspect of human life (economic, physical, and mental well-being). The risk to global economy is severe. Around the world, national economies have been faced with disruptions in economic activities and Ghana is no exception. The manufacturing, tourism and hospitality and transportation are among the hardest-hit. This has resulted in shutdown of some factories, lay-offs, short-time working, redundancy and disruptions in global value chain. To curtail the spread of this deadly virus requires drastic, decisive and proactive measures. At this defining moment, health measures remain the first priority for governments, businesses and society. Showing solidarity and working together to protect staff, customers, and local communities is key in curbing the spread. The Ghana National Chamber of Commerce and Industry (GNCCI), therefore, fully support the partial lockdown of the epicentres of the disease in Ghana. Uncomfortable as this lockdown may be, the Chamber urges its members in the affected areas to adhere strictly to government’s directives. The COVID-19 pandemic and its associated impacts including lockdowns have had dire consequences on businesses, more especially Small and

Nana Dr. Appiagyei Dankawoso I President, Ghana National Chamber of Commerce & Industry

Medium Enterprises (SMEs) in Ghana. The contribution of SMEs to Ghana’s socioeconomic development cannot be overemphasised. Therefore, any adverse effect that threatens the continued viability of SMEs will have a far-reaching and irreversible damage to the Ghanaian economy. To salvage the situation and ensure that the Ghanaian economy is back on track in the not too distant future, government in consultation with key stakeholders have announced certain key measures to mitigate the impact of COVID-19 on businesses. Prominent among the measures are: • A reduction in the monetary policy rate from 16 percent to 14.5 percent and a 2

percent reduction of interest rates on the Ghana Reference Rate (GRR); • A GHS 1billion stimulus package to support businesses, more especially SMEs • a syndication facility of GHS3 billion to support industry especially in the pharmaceutical, hospitality, service and manufacturing sectors; • six (6) month moratorium of principal loan repayments for selected businesses; • extension of the deadline for the filing of taxes from 4 months to 6 months after the end of the basis year; •possible reduction in the cost of data and telecommunications to households and businesses; etc. As the representative organ of the business community in

Ghana, the Ghana National Chamber of Commerce and Industry (GNCCI) fully supports these measures and commends government on the initiatives undertaken thus far. The stakeholder consultation remains crucial to our collective efforts in fighting this pandemic and its adverse impacts. The GNCCI urges government and the Bank of Ghana to continue to work with stakeholders to ensure that the announced measures achieved their intended purpose. More work needs to be done in some specific areas including the following: • The Bank of Ghana must work with the Commercial Banks to ensure that the reduction in policy rate actually translates into reduction in the lending rates thereby minimising the cost credit to business. We all know the tenuous relationship between Policy rates and lending rates. This is the time for the policy rate to be effective in affecting lending rates. • The stimulus package should be linked to industrial value chains for operational resilience. It must be used to strengthen the backward and forward linkages necessary for industrial growth while addressing the interconnected risks within an industry. Government must adopt

a holistic approach in designing and disbursing the stimulus package. Government must swiftly provide clarity on the intended beneficiaries of the stimulus package, the qualifying criteria and arrangements for providing the supports. The Chamber is ready to work with government to ensure a fair and transparent disbursement of the fund to deserving beneficiaries. • There is also the need for further short- to medium-term strategy that deploys fiscal, monetary, tax policy (tax incentives) and trade policy to keep businesses running, prevent lay-offs, and protect vulnerable workers. In the medium-term, a coherent plan must be developed to support the hardest-hit industries, build resilience of the domestic value chain and prepare the country for the next unknown pandemic or economic shock. Now is the time to encourage domestic production given the global disruption of international trade resulting from COVID-19. We must continuously find innovative ways of supporting our domestic firms. The GNCCI will continue to work with government and other stakeholders in promoting and protecting commercial and industrial value chains in the country. Let us all support government’s initiatives to contain the spread of COVID-19 by adhering to the preventive measures. The Chamber urges its members and the business community to continue their voluntary contributions to the COVID-19 Fund.

Ghana deserves a bigger share of the US$100 billion chocolate industry BY VINCENT DJOKOTO The name Tetteh Quarshie is associated with the introduction of cocoa to Ghana. But he was by no means the first to try it out. Preiswerk-Imholf suggests that the Basel Mission imported some cocoa-seedlings from Suriname as early as 1858 and began to yield fruits by the 1860’s. Horton also reported in 1868 that the Basel missionaries attempted to naturalise the Mexican cocoa or chocolate plant. However, it remains a fact and an enviable feat, that when, in 1879, Tetteh Quarshie returned to Mampong-Akwapim from Fernando Po, with a handful of seeds, he provided the economic leadership and technical-knowledge which was a prerequisite of development for the cocoa market economy. Annual totals of cocoa-exported was about 13 tons in 1895. By 1911, it leapt to more than 5,000 tons. It eventually reached nearly 40,000 tons and the Gold Coast became the world’s leading producer

of cocoa. Today, Africa still produces 75 per cent of the global cocoa output, yet it profits only five per cent of the US$100 billion chocolate industry, according to the African Development Bank (AfDB). The development of Ghana depends on the performance of our national economy. I believe the Ghanaian chocolate and dairy industry has the potential to break new grounds with innovative techniques and nutritious recipes. As Ghana develops into a modern Republic, she attracts the interest of more and more people across the globe. They include entrepreneurs, tourists, students and many other global citizens either attract-

ed by the history, culture and beauty of our Republic or the opportunities offered by our domestic economy. Ghana is a worthy Republic in which to invest and reap great returns. It provides an excellent opportunity for the investor who wishes to enter business in Africa. It offers the advantages of a free market enterprise economy, a high degree of political stability, many investment incentives and a rapidly expanding market. It is important for us to manufacture chocolate and dairy products here and encourage indigenous African-owned businesses to choose Accra, Ghana as the preferred location for commercial and industrial activities. The Way Forward. Our traditional role as a bridge builder between African and Caribbean nations must remain a central part of government’s foreign policy. There is a critical need for a more integrated, supra-national organisation of cocoa-producing Republics. We

must deepen our partnership with Cote d’Ivoire, Cameroon, Nigeria, Togo, Sierra Leone, Uganda, Haiti and Madagascar to establish an influential bloc of top producers. Our aim must be to combine capital and technical knowledge in the common economic exploitation of our wealth. This capital investment would be channelled into a climate-friendly modernisation of infrastructure, transportation and technology to overhaul agricultural production. If we can remove trade restrictions, develop a fair tax structure and maintain stable democracies, I believe the economic environment would be favourable in attainment of this objective. So long as the ultimate interest of our citizens remain a priority, we shall multiply the benefits possible for them. But if Ghana is to earn the confidence and cooperation of this economic bloc, then we must lead the charge with a broad set of

pro-business reforms. Small and medium-sized companies are the backbone of our free market and make a significant contribution to the economy. Government must make available a credit facility which targets start-ups and small-scale enterprises, within the chocolate and dairy industry, as a stimulus for innovation and the creation of employment opportunities in the private sector. This credit facility would include fee-free professional advice and technical assistance for manufacturers and distributors. In addition, start-ups and smallscale enterprises should receive corporate tax exemptions so they can improve salaries and grants for employees. Small-scale farm enterprises, however, should be encouraged to merge under various holding companies. Ghana can find herself within the top three producers of chocolate and dairy products globally, within the shortest possible time, if we can strike a fine balance between sound liberal economics and foreign policy. The Author, Vincent Djokoto, is a Business Executive and Columnist.

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REAL ESTATE CORNER

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If there is Corona on the streets, buy real estate!

BY JORGE.OSORIO I dare say that the national precautionary directives over the last two weeks have caused many of us to restrict our movement, limit our social interactions and reassess our priorities in general, and I am sure that, following the President’s directives, last Saturday night, all our movements are being even more restricted. All over the world, people are coming to terms with several lifestyle changes and adapting to a “new normal” for what we all hope will be a short period of time. Of the many conversations I have been a part of since the global spread of COVID-19 escalated, many of them have revolved around its negative impact on modern life. However, it has become increasingly clear that there are some “positives”, from the reduction in environmental pollution, to families spending more quality time through self-isolation, and even having technology that allows us stay connected. Today, I would like to point out another one you may not have considered, that this is the best time to invest in real

estate. As bizarre as my last statement may sound, history has proven that economies are cyclical; this means that a seasonal economic downturn is always followed by an economic peak. The fear of a global economic recession is very valid as many businesses have ground to a halt, particularly those in the travel / hospitality industries. Ghana is also expected to record its own cycle of economic lows and highs with a proportionate rise in the cost of goods and services, especially since the country has such high import volumes. Yet, the fact is that the current situation will be followed by a period of economic recovery that will see an increase in consumer spending. According to a Bloomberg report on 12th March 2020, China’s luxury-goods market has already begun to rebound as quarantine measures relax, and the Chinese are engaging in “revenge spending” sprees after weeks of governmentmandated lockdowns. Please note that China’s crisis started in late December and by now, 3 months after, the economy is already booming, to soon reach peaks higher than before the crisis.

This turn of events is only going to be replicated around the world as the pandemic comes under control. Allow me to use two conditions in the financial market to better illustrate. The first condition is the bull market (or seller’s market) when prices of traded bonds, currencies and commodities are rising or are expected to rise. It is characterised by investor confidence and the expectation that strong results will prevail for a while. The second condition is the bear or buyer’s market, and it is the exact opposite of the first. In fact, it is known as a “buyer’s market” because it offers the best opportunity to buy as both prices and investor confidence are low. Thus, the very season in which a majority of people are not concerned with growing their investment portfolio is the one that offers the greatest return in the long run. Those who understand this principle take advantage of low prices of stocks and assets to increase their wealth. In the words of investing tycoon Warren Buffet, one must “be fearful when others are greedy and greedy only

when others are fearful.” This is why now is the best time to invest in real estate, which is not only a tangible asset but one that appreciates in value over time. The current crisis has demonstrated how fragile financial security is for many people around the world, and a major lesson from this experience is the need to diversify one’s income through multiple sources. Real estate is one of the safest investments one can make: what other asset can generate additional income or be traded for a profit while largely insulating you from global market crashes and uncertainty? How much profit you make depends on a combination of factors, first of which is how much it cost you to begin with. This is why it is important to invest in real estate even when everything looks bleak. Craig Hall, a real estate mogul and author, once had this to say: “Timing is often the single most important factor determining the success or failure of a real estate transaction.” As someone with years of experience in real estate across different markets, I can confidently say that the best

time to buy real estate is right now. An investment in real estate, today, could make the difference between your preparedness or lack thereof for your financial future. It costs nothing to schedule an online appointment with a reputable real estate developer to get a better picture of what your options are. Knowledge is power, and I guarantee that you will not regret knowing more about real estate investment in times like these. The more you know, the better you can prepare towards an investment. As always, I am ever willing to keep the discussion going, so send your emails to jorge. osorio@DevtracoGroup.com so we can learn more together.

JORGE OSORIO

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F E AT U R E

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PROFESSIONALS IN LOCKDOWN:

How to set up a good and safe workplace and ICT provisions at home DIANA VAN DER STEL While many people already started working from home a few weeks ago, the current lockdown in Accra and Kumasi is now challenging all professionals living in these areas. They need to set up a good ICT workplace at home for themselves as well as their family members. Set up a proper work place Normally, you may work a bit on your laptop in the evening, sitting on your sofa, but this is a new situation. To be productive during the whole day, it is recommended to make arrangements for a separate room, or to dedicate a corner in the house where a good table and office chair can be set up, preferably on a height that allows for an ergonomically healthy posture while typing on a keyboard. The chair should equally be comfortable to support your back for long hours. You need at least one electrical outlet and good Wi-Fi or internet connection. Get yourself an additional keyboard and mouse and eventually a large monitor to avoid headaches or neck pains after a long day. Stay concentrated to get things done When your working routine is to leave home in the morning, spend time in traffic and go to the office, it may be difficult to keep disciplined at home and actually sit and get things done. It is therefore good to develop a new daily routine where you create time slots for yourself to concentrate on your work. When you spend too many hours behind a computer screen, your concentration and production inevitably will go down. So set a timer and take a break at regular intervals where you do some physical exercise, a domestic job, or go for a drink to stay hydrated. Having good daylight at your desk boosts productivity, and when the room is quiet, it will help you to concentrate even more. Family life Professionals who are blessed with a working spouse and children at the schooling age will need to adapt considerably more. For them in particular, it is important to organize fixed working lhours and home schooling. A long dining table is ideal to install the whole family for joint work and schooling sessions. Both parents may take shifts spending time with the children while having specific hours in

the day where they can work in a concentrated manner on their own job. Arranging rosters for this, including regular breaks, fun and exercise for the whole family, will avoid a lot of stress and frustration. A safe Wi-Fi network and passwords for your mobile devices 1. While many people work from home, cyber criminals are driving around to look for vulnerable Wi-Fi networks to hack. A Virtual Private Network (VPN) is recommended to provide your home with online protection by means of encryption. If VPN is not feasible for you right now, at least protect your mobile devices against unwanted access with strong passwords. Here are some good practices: Set complex and lengthy passwords, which contain upper and lowercase letters, numbers, and special characters. Avoid common phrases, famous quotations, and song lyrics. 2. Avoid passwords reuse. After setting up a strong, memorable password, reusing it endangers ones accounts. So

change them frequently. 3. Set different passwords on different systems and accounts. Avoid the use of passwords that are based on personal information that can be easily guessed or words that can be found in any dictionary of any language. 4. Choose a password that is easy to remember but difficult for others to guess. Avoid writing your password but rather develop mnemonics to remember them. Cyber criminals are extra active now Unfortunately, Cyber criminals have been reported to abuse the current situation for fraud. Fake emails, text and WhatsApp messages as well as fraudulent websites are being used to trick people. Expect to receive emails from fake government agencies, businesses or employers. This is a typical form of phishing linked to the pandemic. Receivers of these messages think it makes sense that a message is being sent by either their bank, or their own ICT department, with specif-

ic information about the lock down, or extraordinary measures from the government as announced on television. You need to be extra vigilant these days! Of course, it is key to never open these messages or click on any hyperlink, but remove them immediately. In case of any doubt, call your employer, the ICT department, your bank or anyone who would normally be expected to send you a mail to check or verify if it is from them . Fake web shops While we are all at home and urged not to go out to shop unnecessarily, e-commerce is an excellent alternative. Reliable web shops will deliver the goods at your home and you will not have to go outside. At the same time, a completely new category of fake web shops are popping up where people try to sell all kinds of Corona related items such as facemasks. Of course, you will have to pay for these items but they will never be delivered! Tricks to get your information Never reply to anyone who

is asking â&#x20AC;&#x201C; either via an electronic device or in person â&#x20AC;&#x201C; for your confidential information like your pin code or credit card credentials. In particular, elderly people should be warned. People may contact them to offer shopping services during lockdown, offer medical test kits for Corona virus and so on.

Diana van der Stelt, Sales Director at Trinity Software Center, Kumasi and director at Maxim Nyansa IT Solutions Foundation in Tantra Hills, Accra, a training center for ICT professionals. Member, Institute of ICT Professionals, Ghana. For comments, contact (www. trinitysoftwarecenter. com; dianavanderstelt@ trinitysoftwarecenter.com)

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MARITIME

FRIDAY APRIL 3, 2020

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Ports cannot shut down- PMAWCA The Ports Management Association of West and Central Africa has stated that ports in the two Sub-regions cannot shut down in the wake of the coronavirus crisis because they are critical infrastructure and necessary for the survival of nations. The Association in a communique signed by its Secretary-General, Jean-Marie Koffi, has therefore set out stringent health and safety measures to be implemented in all Western and Central Africa Ports in order to preserve workers’ health, limit the spread of the virus and avoid the prolongation of this public health crisis and its economic consequences. Port Authorities are to ensure that the measures are effectively implemented within the stakeholders of the port community and provide all the necessary means to protect employees at the workplace. Port Authorities are also to ensure Harbour Masters implement these new health, safety and security measures immediately. The following measures are: Border restrictions 1. Crew/passengers on board arriving vessels that

have called at ports in mainland China, France, Germany, Iran, Italy, Republic of Korea and Spain within the last 14 days shall remain on board the vessels during the vessel’s stay in port. 2. Crew/passengers arriving from countries other than mainland China, France, Germany, Iran, Italy, Republic of Korea and Spain who wish to land ashore will be served with Stay Home Notice (SHN) 3. With effect from 31st March 2020, Port should cease calls from all cruise vessels. For Shipping Community: 1. New Compulsory Maritime Declaration of Health (attached is Singapore Maritime & Port Authority new declaration as of March 20th, 2020) For ISPS Restricted Areas: 1.Enforced social distancing for port workers; 2. Observing other health precautions for all port workers; 3. Enhanced access control with temperature taking checkpoints For Port Community Stakeholders: All stakeholders should take precautionary measures for eligible staff to telecommute.

SIGA visits GPHA to foster collaborations towards optimum profitability Management of State Interests and Governance Authority (SIGA), has paid a working visit to the Ghana Ports and Harbours Authority (GPHA) to foster deeper working relationship. The team was received by the Board Chairman of the Ghana Ports and Harbours Authority, Peter Mac-Manu, the Director General of the GPHA, Michael Lujuge, and some senior management of the Authority. “It is important that from time to time they come to take a bird’s eye view of what is happening in the enterprises under their interest for the shareholders,” the Board Chairman of GPHA stated. Stephen Asamoah Boateng, the Director General of SIGA stated that new strategies have been adopted by his outfit to ensure that the state interest is protected. He emphasized the new status of his outfit, where they now assume the responsibility of ownership of acquisition, receipt, holding and administration or disposal of shares of state-owned enterprises and joint venture companies.

He encouraged such institutions such as the Ghana Ports and Harbours Authority to align with the ongoing new development. He said his outfit is resolute to ensure prudent management of expenditure by state institutions that SIGA has oversight, in order to reduce the burden on government. “Our job is to look after the expenditure levels and how we manage the risk exposure of SOEs and others. [This] helps the Finance Ministry as well,” he articulated. The Director General of the

Ghana Ports and Harbours Authority, Michael Luguje, said the Authority would continue to collaborate with the State Interests and Governance Authority, to ensure GPHA remains afloat in its enterprise. “We will work very hard despite the challenges we are facing to ensure that we remain afloat and profitable as the circumstances would permit us to be.” He also revealed that the Port Authority would take up the national call for the use of Made in Ghana products, for national development.

Takoradi Port undertakes operation to onload Combi Dock 1

The Takoradi Port has undertaken a specialised operation to on-load some ocean-based machinery, unto a heavy load carrier known as Combi Dock 1 for departure to Taiwan. This equipment, which include barges, tugboats, caterpillars among others, belong to a South Korean company, who were contracted for the Aboadze Thermal Plant. They have ended their stay in Ghana, and are en route to other areas for work. According to the Harbour Master at the Port of Takoradi, Capt. James Richmond Quayson, who superintended the operation, the

Takoradi Port’s new bulk jetty was conducive for handling the supercargo. “This our new bulk jetty is -16m draft and they found this place conducive for the operation.” He said the Port of Takoradi, is modernising and thus, open for a variety of activities that would contribute to shipping and maritime for Ghana and the West African Sub-region. Captain of the Combi Dock 1, commended the efficiency of the Takoradi Port for providing a conducive working environment for the vessel’s operations. “We had only positive impressions of the whole operation at the Takoradi Port.”

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N E W S / F E AT U R E

FRIDAY APRIL 3, 2020

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Interplast donates GHC 1.2m to COVID-19 Fund Interplast Ghana has presented a cheque of GHC 1.2million to the National COVID-19 Trust Fund to support government contain the spread of the disease, as part of the company’s corporate social responsibility. Mr. Hayssam Fakhry, Managing Director of Interplast Limited, presented the cheque to the Chief of Staff, Ms. Akosua Frema Opare at the Jubilee House in Accra. Ms. Akosua Frema Opare, who received the cheque on behalf of the Fund, called on other organisations to support the government is these critical times. She also used the opportunity to encourage industries to educate their workers on the hygiene protocols and social distancing to help stop the spread of the disease. Interplast is West Africa’s leading producer of plastic pipe systems. Interplast was established in 1970 and is a fully Ghanaian owned company with active export business in more than 22 African countries.

Ebola Lessons for Fighting COVID-19 NGOZI OKONJO-IWEALA On April 12, the Democratic Republic of the Congo will mark 42 days since the last person who tested positive for Ebola was discharged from the hospital. The date is a significant milestone. It refers to twice the maximum incubation period – 21 days – of the virus, which is how the World Health Organization stipulates when an outbreak is over. If all goes well, it will be a remarkable turnaround for the DRC and a testament to the bravery and dedication of health workers, some of whom lost their lives treating the sick. The DRC’s success in combating Ebola was overshadowed by the fact that, during that fight, approximately twice as many people died from a preventable measles outbreak. One essential lesson for policymakers grappling with the greatest global health crisis in a century is that they must do everything in their power to prevent overstretched health systems from battling two epidemics simultaneously. Bloodshed and fighting during a brutal civil war exacerbated the challenge facing the DRC as it fought the Ebola and measles outbreaks. The country experienced profound difficulties immunizing its population against entirely preventable diseases. It found itself fighting a multi-front health battle when it desperately needed to marshal its available resources against a

major threat. The trajectory of COVID-19 may be less advanced in many of the world’s poorest countries, but we must not fool ourselves that a warmer climate, or a younger demographic profile, will blunt its impact. The potential for death and disruption is even more pronounced than in the richer countries where the virus has hit hardest. And yet weathering two significant health threats simultaneously has shown us how to prevent this nightmare scenario. Our first priority is to maintain existing immunization programs. For measles, polio, or any other disease for which a low-cost vaccine is routinely available, it is critical that herd immunity is maintained in order to prevent any unnecessary drain on scarce healthcare resources. Next, we must bolster preparedness. A number of organizations, including Gavi, the Vaccine Alliance (of which I am Chair), have made funds available – $200-$300 million in Gavi’s case – to help the world’s poorest health systems step up surveillance activities, invest in testing, procure protective equipment, and train health workers. Technology is playing a part, too: Despite valid privacy concerns, some countries are rolling out tracing apps – a relatively low cost, effective way to mitigate the virus’ spread. Africa is also using drones to distribute vaccines, protective equipment,

and other vital supplies to remote areas. Social distancing will slow the spread of COVID-19, but it will not win the war. Our best hope lies in finding a vaccine. While there may be 41 candidates of varying promise in the pipeline, we must learn from past mistakes. Too often, governments have sequestered vaccines in the countries where they were manufactured. We must ensure that when an effective vaccine becomes available, it is accessible to anyone who needs it, not just the rich, fortunate few. There are ways to avoid the inequitable distribution of vaccines. Gavi, which procures and distributes vaccines to 60% of the world’s children at affordable prices, regularly employs innovative mechanisms such as the International Finance Facility for Immu-

nization, Advanced Market Commitment, and Advanced Purchase Commitment to encourage vaccine production and delivery. In the case of Ebola, Gavi created incentivizes for Merck to stockpile an experimental Ebola vaccine that was then made available to the WHO, which deployed it in the DRC. It can incentivize the production, scale, and equitable global distribution of a vaccine for COVID-19 as well. Poorer countries in Africa and elsewhere may be unable to deal with both the health and economic fallout of this pandemic on their own. The global effort that is already underway is essential, because COVID-19 knows no borders. No country is safe until every country is safe. e are not yet near the end of the beginning of the COVID-19

crisis. We must use what precious time we have to bolster our weakest health systems and economies. But shoring up our defenses is not enough. We must go on the offensive by making the development and global distribution of a vaccine our highest priority

Ngozi Okonjo-Iweala is Board Chair of Gavi, the Vaccine Alliance. Copyright: Project Syndicate, 2020. www.project-syndicate.org

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OPINION

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ECORONOMICS

BY NORVAN ACQUAH– HAYFORD COVID-19, which is a member or a strain of the Coronavirus family, has changed how things are done in the world. It has, within three months, changed how business is conducted and the social life of people in both advanced and developing economies. In the world today, travel restrictions and lockdowns are key features of measures deployed by governments to contain the fast-spreading disease. It is a phenomenon that has brought some of the world’s large multinationals to their knees, as economies and financial markets wobble. In Ghana, we are experiencing a partial lockdown with restrictions on movements in two major cities: Greater Accra and Greater Kumasi— which include major metropolitan areas such as Tema, Kasoa and its environs. So far we have recorded 204 cases with 5 deaths and 31 recoveries. With our greatest enemy being FEAR, what do I want to really talk about in this article? Well it is how you and I have been affected economically by this pandemic and how it is succeeding in bringing businesses to a standstill; shutting economies by closing factories and retail businesses; crushing financial markets; and, as at March 31, flattening crude

oil prices. Historically, we are seeing WTI crude oil sell at $20 per barrel and Brent Crude also selling for $23 per barrel. There are lessons to learn from the experience of other countries in dealing with not just the coronavirus but also previous crises such as the Ebola and SARS outbreaks which came close to us. Since December 2019, we sat and watched China struggle alone to deal with what some considered a ‘Chinese problem’ Wuhan. The disease moved far and wide through January and February and when other countries were recording cases, as usual, we were not prepared. Reality hit us on March 12 when we [Ghana] recorded our first two (2) cases. But all the same, I will say, we woke-up from our slumber and have somewhat done well in going for the all-of-government approach that has helped countries such as China, Singapore and United Arab Emirates (UAE) to contain the virus. I think our government, led by President Nana Addo Dankwa Akufo-Addo, is working hard to protect and I agree with most of the measures taken so far. But I honestly think when he announced the restrictions, it should have taken immediate effect on the day. Giving 48-hour notice allowed people to move from the hotspots to other parts of the country.

Economic Impact To borrow a quote from the former Finance Minister, Seth Terkper, “Austerity is an inherent part of fiscal management, you either prepare for it with your own fiscal discipline, buffers and stabilizers or it will be forced on you by your benefactors.” This simply means that managers of the economy must look at all possible scenarios in putting together fiscal policies and plans. This I dare say we forget to do in good times and it comes back to bite us hard. Since we don’t have the full details of the Corona Alleviation Programme (CAP) from the Finance Minister I will not spend a lot of time looking at the likely impact on us but will say the statement, as presented to Parliament, gives us some hope but very little. At least, it is an indication of how government is thinking and how they plan on reviving the economy post-COVID-19. Shortfall in petroleum revenues or crude oil receipts, according to Mr. Ofori-Atta, amounts to some GH¢5,679 million. This he said meant the corresponding projected revenue shortfall in Annual Budget Funding Amount (ABFA) is GH¢3,526 million; and Ghana Stabilisation Fund and the Ghana Heritage Fund are GH¢1,058 million and GH¢453 million, respectively. I am sure you may be asking yourself the question: besides COVID-19 emergencies, what

happens to the FREE SHS? This because we are using more than 70% of the ABFA to fund free SHS. Indeed, the government needs help financial to sustain its key programmes and policies. Dangerous Measures Let me now go straight to the three measures, proposed by the Minister, which I think are dangerous for us. I think we must be careful not to grant it to him and the government. 1. Reduce the proportion of Net Carried and Participating Interest due GNPC from 30% to 15%. 2. Amend the PRMA 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. 3. Amend the Bank of Ghana Act to allow for government borrowing from BOG up to 10% of previous year’s tax revenue in the event of tight domestic financing market conditions. We are told of lowering the cap on the Ghana Stabilisation Fund (GSF) from the current US$300 million to US$100 million, this means we immediately have $200 million at hand; also the World Bank and the IMF are giving us loans and grants, which is in excess of about $600 million. These exclude the loans we are contracting, including funds from the US$3 billion Sovereign Bond. This means

we have at our disposal enough funds to put to work in our fight against COVID-19. My question is why touch the GNPC, Heritage Fund and be allowed to borrow more from the Bank of Ghana without considering the use of the loans contracted? My simple point here is that, if Parliament grant these amendments the Finance Minister is seeking, it will open the flood gates for the government of the day to dip its hands into the Heritage Funds with any kind of excuse, especially in an election year. An incumbent will want to win at all cost and will do anything to stay in power. I rest my case.

Norvan Acquah–Hayford

The views expressed are that of the author and does not represent or reflect the stance of this media outlet. He can be reached via norvan986@ gmail.com

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F E AT U R E

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The Priority for the Social-Distancing Period

BY PROF. MICHAEL SPENCE The coronavirus has a chokehold on the global economy. Like many friends and colleagues in China, I, too, have been locked down, along with the rest of Italy. Many of my fellow citizens in the United States are now in the same situation; others around the world will follow suit soon enough. Because the virus can apparently be transmitted by those without symptoms, it has spread widely and under the radar of public-health authorities. To prevent health systems from being overwhelmed, aggressive social-distancing and self-isolation measures have been broadly implemented and accepted by the public. Whether they will slow the rate of transmission and limit the number of critical cases in the West remains to be seen. Evidence that the epidemic has been curtailed or even contained in China and some other Asian economies is promising. These countries, however, relied not just on social distancing, but also on a vast array of tools that have not been extensively deployed in Europe and the US: widespread testing, contact tracing, mandated isolation, and so forth. Everywhere, however, measures to mitigate the pandemic have produced a sudden stop to much economic activity, with essential services often among the only sectors exempted. The result will be a sharp drop in GDP and in-

comes, a near-certain spike in unemployment (as already seen in the US), a disrupted school calendar, and the suspension of pretty much any activity involving gatherings of more than a few people. For some, videoconferencing, online education, and other digital applications have cushioned the blow. But the inevitable economic outcome will be a deep recession and far-reaching collateral damage to people’s livelihoods and wellbeing. Locking down the economy is correctly viewed as a way to buy time to expand capacity and reduce the peak-load demand on health systems. But it is not a complete strategy. Even when combined with monetary accommodation and a large fiscal program geared toward protecting vulnerable people and sectors, an economic deep freeze cannot be sustained without eventually imposing unacceptable costs on individuals and society. Large portions of the modern economy – not least restaurants, retail, theatres, sporting events, museums, parks, and many forms of tourism and transportation (such as air travel) – simply cannot operate under conditions of social distancing. These sectors account for a significant share of total employment. Other large sectors can still function, but not on all cylinders. The question, then, is what can be done now to ensure that the recovery and return to normalcy happens as safely as possible. A lockdown of an economically tolerable duration cannot in itself reduce the

risks associated with interpersonal interactions. Within a number of weeks – say four to six – the economic costs of the lockdown will start to mount, at which point some group of people will start returning to work if there is any to be had, simply because they have no choice. (For many poor people in India, where the economy was locked down this week, the crisis will be immediate.) Though the risks of infection will remain high, they will not have the resources to remain isolated. At the same time, although the costs of closing schools for long periods are very high, schools will not or should not reopen until the risks of a coronavirus resurgence are low to nil. The speed and safety of the recovery thus will depend critically on whether the risks of group activities have been lowered sufficiently. One important element of risk reduction concerns health-system capacity. The current focus on adequately equipping and protecting doctors and medical staff with what they need to provide critical care is therefore entirely justified. But these front-line efforts will not reduce the risks of interpersonal contact more generally. To do that, we must use the lockdown period to expand the capacity for testing, contact tracing, isolation, and treatment. Here, a March 25 briefing from Tedros Adhanom Ghebreyesus, the director-general of the World Health Organization, is well worth reading. “Asking people to stay at home and shutting down population movement is buying time

and reducing the pressure on health systems,” Ghebreyesus explains. “But on their own, these measures will not extinguish epidemics. The point of these actions is to enable the more precise and targeted measures that are needed to stop transmission and save lives.” If I were amending this clear statement of purpose, focused on health, I would only add to that last sentence: “… and to reduce infection risks, restart the economy, and accelerate the recovery.” After explaining what those more precise and targeted measures require, Ghebreyesus added that exactly the same steps will be required in countries – including many developing, lower-income economies – that still have low infection counts. We can already foresee that some of these countries will need external assistance to prepare for domestic outbreaks. International cooperation and support are thus crucial for managing the crisis at the global level. In any case, the key point is that the steps needed to restart the economy are the same as those needed to slow the transmission of the virus. As we anticipate the end of aggressive social distancing, building the capacity for testing, contact tracing, isolation, and treatment becomes an urgent economic priority. We absolutely must drive down the risks of interpersonal contact so that those who feel they must return to work can do so, and so that those inclined to self-isolate voluntarily can return to schools and full economic activity, feeling relatively safe.

The Asian cases suggest that digital technologies are effective tools for targeting and monitoring infections, and for keeping people and authorities informed about risks. Some of the most effective techniques rely on location data and may raise privacy concerns in some countries. But given the scale of the challenge, these methods should not be dismissed out of hand. The platforms already have location data that could be used to inform citizens of potential exposure. After all, digital infrastructure has already proven to be a key source of economic resilience in this crisis. Without it, remote working and schooling, e-commerce, and digital financial services would not be possible, and aggressive social distancing would have already brought the economy to a near-complete halt.

Michael Spence, a Nobel laureate in economics, is Professor of Economics at New York University’s Stern School of Business and Senior Fellow at the Hoover Institution.. Copyright: Project Syndicate, 2020. www.project-syndicate.org

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