The Minister of Finance, Ken Ofori-Atta, says the new budget to be presented in Parliament in July this year, will reposition Ghana’s economy to meet the global effects of the novel Coronavirus pandemic.
According to him, since the 2020 budget has been disrupted due to the pandemic, there is the need for a new fiscal policy to re-examine government expenditure to meet revenue target.
Earlier this week, the Finance Minister had announced that government will present a new budget to Parliament due to the economic impact of the COVID-19.
Speaking on Citi TV’s, The Point of View, he said government would have to make some sacrifices and readjust to meet revenue targets.
“It is a time of sacrifice and understanding. Sometimes I wonder if people have divorced themselves from the reality that this could lead to some serious debt. We will be uncomfortable running a system with a lot of inefficiencies so some of those will be accentuated; but ours is to find ways to mitigate that. That comes to choices. There is a lot of things in play depending on the severity that we are going to experience; but one has to keep the eye on the ball to make sure we do not derail everything that we are doing,”he said.
He further noted that deliberations are underway among Finance Ministers in Africa to come out with strategies to restore the yields realized in the face of no disease outbreak.
“A number of meetings we have had with the Finance Ministers in Africa are aimed at trying to reposition this whole global architecture to see if this is the most fit for purpose architecture. We are pushing for reliefs, we are pushing for postponement, and that will allow us to make fiscal space for us in order not to wipe out of the season. Fortunately, we are beginning to build a consensus globally as to how to manage this. We are just going to have to relook at all the fundamental assumptions for the budget and signal to Parliament that come July, we should come with some more information and analysis so that we address the base,” he said.
Coronavirus pandemic to cost Ghana GHS9.5bn – Finance Minister
On Monday, the Finance Minister announced that government had raised an additional 9.5 billion cedis to fight the COVID-19 pandemic, a situation that may move the 2020 budget deficit to over 7 percent.
This will be 2.5 percent of Ghana’s revised GDP.
“Speaker, the total estimated fiscal impact from the shortfall in petroleum receipts, shortfall import duties, the shortfall in other tax revenues, the cost of the preparedness plan, and the cost of Coronavirus Alleviation Programme is GHS9,505 billion,” the Minister said when he appeared in Parliament.
Ultimately, there will be a “fiscal gap of GHS11.4 billion,” he added.