Business school lecturer Professor John Gasti has said the Ghana Stabilisation Fund has ample money to deal with the COVID-19 pandemic.
Finance Minister Ken Ofori-Atta tabled before Parliament on Monday, 30 March 2020, a request 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 emergencies.
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 Stabilisation Fund at US$100 million, it means automatically US$288.60 million is available to finance the Coronavirus Alleviation Programme.
“Using today’s exchange rate of GH¢5.70, this will be GH¢1.65 billion to cater for the COVID-19.
“Also, if the Stabilisation Fund withdrawal allows for 70% withdrawal from the US$100 million, that will be US$70 million. A US dollar which is equivalent to GH¢5.70 will give you GH¢399 million”, he explained.
At the end of 2019, the Stabilisation Fund accumulated US$388.60 million.
Explaining further, Professor Gatsi said since no amount has ever been withdrawn from the Heritage Fund unlike the Stabilisation Fund, it currently accumulates more than the Stabilisation Fund
At the end of 2019, the Heritage Fund accumulated US$579.61 million. So, at today’s exchange rate, a total of GH¢3.3 billion will be available.
“Since the Heritage Fund receives the least amount of petroleum revenue, it is only past disciplined fiscal behaviour 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% of members of Parliament to change the law, the Stabilisation Fund has adequate amount of money to deal with the COVID-19 and shortfall in the ABFA”, he concluded.