COVID-19 in Ghana: Consequences for Poverty, and Fiscal Implications

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Issahaku, Haruna
Abu, Benjamin Musah
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African Economic Research consortium
This paper estimates the poverty consequences of the COVID-19 pandemic and its fiscal implications in Ghana using a micro-simulation analytical approach applied to household level data collected in 2016/2017 by the Ghana Statistical Service. The results show that the poverty consequences are massive as poverty increased from a base of 20.5% to 34.0% and drove over 4 million pre-COVID non-poor into poverty. The poverty consequences are triggered by income losses of up to US$ 330 million and equalling 5.4% of monthly GDP. The pandemic has also worsened inequality as inequality rose from a base of 42.1% to 47.5%. The fiscal cost of a universal cash transfer potent enough to restore poverty to pre-COVID level is a monthly expenditure of US$ 186 million, which represents 3.1% of monthly GDP. COVID-induced interventions on water and electricity rebates for three months are less effective in reducing poverty. Disaggregated findings based on locality show varying depths of impact. The policy implications of these findings are important for appropriate interventions to tackle the consequences of the pandemic.