The government has revised this year’s projected economic growth rate target of 5.8% to 3.7%.
According to the Finance Minister, Ken Ofori-Atta, the reason behind the revision includes the heightened global pressures such as the Russia-Ukraine war which has caused the revenue measures to underperform.
He disclosed this during the presentation of the mid-year budget to Parliament for approval on Monday.
“The macroeconomic environment has significantly changed, prompting the revision of the macroeconomic framework. Furthermore, based on the developments for the first six months of 2022 and the outlook for the rest of the year, we have accordingly revised the macro-fiscal targets for 2022 as follows; Overall GDP Growth rate of 3.7 percent down from 5.8 percent; Non-Oil GDP Growth rate of to 4.3 percent down from 5.9 percent; End period inflation of 28.5 percent up from 8 percent; The overall fiscal deficit of 6.6% of GDP down from 7.4%; Primary surplus of 0.4% of GDP up from a surplus of 0.1% of GDP; and the Gross International Reserves of not less than 3 months import cover.”
Furthermore, Ken Ofori-Atta announced the revenue measures that will shore up the government’s efforts to revive the economy. This includes some proposed amendments and revisions to the collection of Value Added Tax revenue.
“The digitalization of our Revenue Mobilization processes remains a key focus; therefore, the GRA is finalizing all relevant processes to facilitate the effective collection of VAT revenue. This includes a proposed amendment of the Value Added Tax Act 870 to enable its electronic collection, effective 1st October 2022. Also, there will be an introduction of upfront payment of VAT on importers not registered for VAT with the implementation start date of 1st October 2022.”
He continued, “It is fundamentally important that, together with the Ministry of Local Government, we continue to assist and support the Assemblies, not only to expand their revenue base but to do so with optimal efficiency and effectiveness. Therefore, the collective efforts of the local government, the Assemblies, and the GRA in launching an end-to-end digitalized process will be realized by August.”