Finance Minister, Ken Ofori-Atta, says Ghana will record a significant drop in revenue target for 2020 due to the COVID-19 pandemic.
He warns that the country is recording a huge decline in revenue from the port, petroleum revenue receipts as well as tax revenue due to economic slowdown being witnessed as the world fights the spread of the COVID-19 pandemic.
Government is targeting total Revenue and Grants for 2020 to reach 67.0 billion cedis.
But addressing parliamentarians on government’s plans of containing the spread, Mr. Ofori-Atta announced that the situation will lead to an increase in Ghana’s fiscal deficit.
“Preliminary analysis of the macro-fiscal impact of the pandemic shows that there is likely to be a significant slowdown in our GDP growth, significant shortfalls in petroleum revenues, shortfalls in import duties, shortfalls in other tax revenues, increased health expenditures, and tighter financing conditions with consequences on the 2020 Budget,” he said.
He explained that reflecting on the fiscal measures being taken by government, the country is likely to see a fiscal deficit of 6.6% of revised GDP.
“The corresponding primary balance is a deficit of 1.1% of rebased GDP. The resulting fiscal deficit as a percentage of GDP is in excess of the 5% threshold stipulated by the Fiscal Responsibility Act, 2018 (Act 982)”.
He added the the primary balance is a deficit equivalent to 1.1% of GDP contrary to the positive balance prescribed by the Fiscal Responsibility Act.
Coronavirus pandemic to cost Ghana GHS9.5bn – Finance Minister
The novel coronavirus pandemic is set to cost Ghana GHS9.505 billion, according to Ken Ofori-Atta, the Finance Minister.
“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 million,” he said when he appeared in Parliament on Monday, March 30.
Gov’t requests to use part of Heritage Fund for COVID-19 fight
Meanwhile, the Finance Minister, Ken Ofori-Atta, is calling for the amendment of the Petroleum Revenue Management Act (PRMA) to allow government to utilize portions of the Ghana Heritage Fund to deal with the Coronavirus pandemic.