Expect major changes in mid-year budget - Finance Minister
Finance Minister - Ken Ofori Atta
The Minister for Finance, Ken Ofori-Atta has hinted that a lot of changes may occur in the 2020 mid-year review budget which will be presented in July 2020 as a result of the COVID-19.
Earlier, the financial budget for 2020 was targeted at building the country’s infrastructural needs, particularly roads.
According to Mr Ofori-Atta, the 2020 budget is out of gear due to the COVID-19 pandemic, hence, the need to review the government’s expenditure and readjust events to meet revenue target.
“We have to relook at all the fundamental assumptions of the budget and I did signal to Parliament that, come July, there would be a lot more information and analysis because what is the new normal and how do we address the thing that invariably is going to occur? You remember in the first budget we spoke about the preferential option for the poor, remove these taxes and let people do what they want and now we are just coming down to the bottom of the Maslow theory and we are saying keep body and soul together. At the same time make sure infrastructure is being managed.”
How much will COVID-19 cost Ghana?
According to the Finance Minister, Ken Ofori Atta, he announced that COVID-19 pandemic is likely to cost the country some GH¢9.505 billion, thus, moving Ghana’s 2020 budget deficit to over 7 per cent.
“Mr 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,” he said when he appeared in Parliament today, Monday.
Also, this will represent a 2.5 per cent of Ghana’s reviewed GDP.
Automatically, the situation was going to take a toll on Ghana’s GDP growth.
Ultimately, there will be a “fiscal gap of GHS11.4 billion,” the Minister added.
Also, he said import duties, which has seen a decline already will fall short by a target of GHS808 million for the 2020 fiscal year, the Minister indicated.
So far, the negative effect of the virus on the economy is worsening by the day following a two-week partial lockdown of Accra, Tema, Kumasi and Kasoa.
Mr Ofori-Atta, however, has said an initial analysis of the impact of the virus “on the real sector shows that the 2020 GDP growth rate could decline from 8 per cent to 2.6 per cent with the virus outbreak and 1.5 per cent as a result of the partial lock-down.