Gov’t wants GH¢11.8bn more funds to execute its programmes
Finance Minister, Ken Ofori-Atta, has indicated the covid-19 pandemic has compelled government request for GH¢.11.8bn in additional expenditures.
Projected expenditure by the government is expected to hit GH¢ 109.9billion for 2020.
In presenting the Mid-Year Fiscal Policy Review on Thursday, July 23, Mr Ofori-Atta stated that: “Whiles this pandemic requires us to exceed the limits imposed by the FRA, Act, 982, we have had to make these major expenditures to protect lives and livelihoods of Ghanaians and sustain businesses. We, therefore, request a supplementary Budget of GH¢11,896,477,566.00 to enable us to continue this extraordinary task”.
The funds will be used to cater for COVID-19 preparedness & response plan, provision of health infrastructure (Agenda 88+), coronavirus alleviation programme, capitalisation of the National Development Bank, security, elections, and payment of outstanding claims.
As COVID-19 plunged global crude prices, Mr Ofori-Atta indicated that updated fiscal estimates suggest that revenues are expected to fall short of the initial 2020 Budget target by GH¢13,632 million (3.5% of revised GDP) arising from shortfalls in Petroleum Receipts of GH¢5,257 million; Non-Oil Tax revenue GH¢5,089 million; and Non-Tax Revenues of GH¢3,286 million.
Mr Ofori-Atta was worried that the country had been hit with a double shock of a health pandemic and a global economic recession.
These have resulted in unanticipated but necessary expenditures of approximately GH¢11.7 billion.
Consequently, the projected fiscal deficit is now 11.4% of GDP, higher than the 4.7 % of GDP forecast before the pandemic.
The development exceeds the 5% limit, as stated in the Fiscal Responsibility Act, 2018 (Act 982).
It also exceeds the allowance due to COVID-19 which the Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Quartey had cautioned.
The economist had requested the government to desist from exceeding 8% of the fiscal deficit.
However, Mr Ofori-Atta explained that the gap was not because of profligate spending or mismanagement of the economy, but the “inescapable exigencies of the time”.
The government has so far raised 20billion to fight the pandemic that has claimed 153 lives.
A total of 29,672 cases have been confirmed with 26,090 recoveries/discharges.