Finance Minister Ken Ofori-Atta has hinted that Ghana’s fiscal deficit will be up by some GH¢11.4 billion end of 2020 if no measures are incorporated to deal with covid-19.
The figure represents 2.9 percent of Ghana’s revised Gross Domestic Product (GDP), Ken Ofori-Atta said while briefing Parliament on the measures taken by government to mitigate the likely impact the Coronavirus pandemic.
“Mr. Speaker, a recalibration of the 2020 Fiscal Framework underpinning the approved 2020 Budget to reflect the fiscal impact of the coronavirus, as outlined above, without incorporating measures, shows that the overall fiscal deficit will increase from the programmed GH¢18.9 billion (4.7% of GDP) to GH¢30.2 billion (7.8% of revised GDP). The primary balance will correspondingly worsen from a surplus of GH¢2,811 billion (0.7% of GDP) to a deficit of GH¢5.6 billion (1.4% of GDP).
“Mr. Speaker, measures are, therefore, required to close the fiscal gap of GH¢11.4 billion (2.9% of revised GDP), the Minister told the House, Monday, March 30, 2020.”
The Finance Ministry also estimates the economy to record a loss of over GH¢9 million this year due to the coronavirus pandemic.
It stipulates an estimated fiscal impact from the shortfall in petroleum receipts, shortfall import duties, shortfall in other tax revenues, the cost of the preparedness plan, and the cost of Coronavirus Alleviation Programme is GH¢9,505 million (2.5% of revised GDP).
The anticipated decline in import volumes and values, as well as the slowdown in economic activities, will lead to shortfalls in both import duties and other tax revenues, the ministry acknowledged.
The Finance Minister also told the House that his Ministry plans to immediately release an amount of GH?1 billion upon approval by Parliament.
“The Ministry is proposing to use the equivalent of USD 219 Million from the Stabilisation Fund,” he added.