Finance Minister, Ken Ofori-Atta has hinted that government may present a new budget to Parliament by July due to the COVID-19 Pandemic.
The 2020 financial budget was targeted at building the infrastructure needs of the country, particularly roads.
Speaking to Citi News, Mr. Ofori-Atta stated that with the 2020 budget out of gear due to the COVID-19 pandemic, there is the need to reassess government expenditure and realign 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.”
Coronavirus pandemic to cost Ghana GHS9.5bn – Finance Minister
The Finance Minister on Monday announced that government had raised an additional 9.5 billion cedis to fight 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.
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.”