The Minister of Finance, Ken Ofori-Atta is hopeful that the new budget to be presented in Parliament in July 2020, will reposition Ghana’s economy to meet the global impact of the COVID-19 outbreak.
He says discussions are already underway among Finance Ministers in Africa to find mechanisms to restore the gains achieved in the face of no disease outbreak.
Mr. Ofori-Atta had announced that the government will present a new budget to Parliament due to the current situation.
Speaking on The Point of View on Citi TV, the Minister said since the 2020 budget has been thrown out of gear due to the pandemic, there is the need for a new fiscal policy to reassess government expenditure and realign events to meet revenue target.
“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 but ours is to find ways of mitigating that. A lot of things come to play depending on the severity we are going to experience. But one has to keep the eye on the ball to make sure we do not derail all that we are doing.”
“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 pace 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 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 remarked.
Ghana loses GHS 9.5bn to Coronavirus outbreak – Finance Minister
The Finance Minister on Monday announced that Ghana may lose abouth GHS9.5 billion in the fight against 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,” the Minister added.
Import duties, for example, will fall short of target by GHS808 million for the 2020 fiscal year, the Minister indicated.
The effect of the virus on the economy will worsen because Ghana began a two-week partial lockdown of Accra, Tema, Kumasi and Kasoa on Monday, March 30, 2020.
The pandemic will also take a toll on Ghana’s GDP growth.
Mr. Ofori-Atta said a preliminary analysis of the impact of the virus “on the real sector shows that the 2020 projected real GDP growth rate could decline from 8 percent to 2.6 percent with an outbreak and 1.5 percent with a partial lock-down.”