An Economist, Dr. Adu Owusu Sarkodie, says the Finance Minister, Ken Ofori-Atta should be able to outline the progress made so far with the allocation of support under the government’s Coronavirus Alleviation Programme when he presents the Mid-year budget review to Parliament later this month.
Dr. Sarkodie says limiting budgetary allocation is critical, since an increase is likely to impact the country’s budget deficit, which is the difference between the revenue and expenditure.
Ken Ofori-Atta is expected to present to legislators revised estimates on the performance of the economy he presented in November 2019.
Although this is normal practice, the impact of the coronavirus pandemic on the economy makes a review of economic figures for the remaining six months of the year inevitable and much more critical.
For instance, in 2020, Mr. Ofori-Atta anticipated that government would rake in an amount of 67.1 billion cedis as revenue, while an amount of about 86 billion cedis will be spent on various projects.
This in itself presented an initial budget deficit of 19 billion cedis.
For Dr. Adu Sarkodie, the presentation should see a review of all key economic indicators. These include; growth rate, primary balance, budget deficit, revenue and expenditure targets, among others.
“In all these, I think the Finance Minister should be able to tell us how far we have come with this program. What is needed to be done and how we are going to revive our economy and make sure that, we come back on track. So, there must be a review of everything,” he said.
Already, Mr. Ofori-Atta has outlined the margin of reduction expected in some projected revenue from taxes; both oil and non-oil.
Also, this has forced him to make some projections on how the drop will impact the budget deficit for the year.
For instance, import duties are expected to drop by 808 million cedis, while total revenue excluding oil, is expected to drop by 2.25 billion cedis.
The budget deficit, which is the difference between the revenue and expenditure, is also projected to increase by 11.3 billion cedis representing 2.9% of revised GDP for 2020.
Dr. Adu Sarkodie maintained that the Minister of Finance may fall on the 9.5 billion cedis Coronavirus Alleviation Programme plus the 10 billion cedis support from the Bank of Ghana to finance these differences.
Meanwhile, he says the steady pickup in economic activities especially in the informal sector of the Ghanaian economy; the earlier projected losses could see an improvement when the Finance Minister appears before Parliament.
“The first quarter figures indicate that we grew by 4.9% as against 6% last year, first quarter. So, it is very likely that we will do better that the 1.5% projected. Our reasons been that the Ghanaian economy is largely informal and because the lockdown has been lifted many people have gone back to work and therefore it is very likely that we will do better than the 1.5,” he added.
