Finance Minister, Ken Ofori-Atta on Thursday tabled a motion to seek parliamentary approval to spend additional GH¢11,896,477,566.00 as supplementary estimates to support government expenditure for the rest of the year.
The presentation is in accordance with Article 179 (8) of the 1992 Constitution of Ghana, Standing Order 143 of the House as well as Section 28 of the Public Financial Management Act (2015), Act 921 which requires the Finance Minister to prepare and submit to Parliament a mid-year fiscal policy review not later than July 31 of each financial year.
The Finance Minister had earlier on November 13, 2019 presented the government’s fourth Budget Statement and Economic Policy to Parliament which according to him was focussed on providing the type of required liquidity to boost the country’s industrialisation drive.
This particular year’s presentation highlighted on the government’s plan on how the country is to recover from the shocks of the economy due to the withdrawal of advanced monies from the Contingency and Stabilisation Funds following the COVID-19 pandemic and touched on key economic indicators such as growth rate, primary balance, budget deficit, revenue and expenditure targets among others.
The Minister had earlier in the year announced that government will require about 9.5 billion cedis to fight the COVID-19 pandemic, a situation which may move the 2020 budget deficit to over 7 percent after Parliament in April approved government’s request to withdraw GHS 1.2 billion from the Contingency fund to finance the Coronavirus Alleviation Programme (CAP).
The Minister said the outbreak of the pandemic is having a negative impact on the financial sector not only here in Ghana but also across the world and that all over the world, central banks are being relied upon by governments to find the liquidity to tackle the socio-economic difficulties unleashed by the pandemic.
He said the COVID-19 pandemic has also led to disruption in corporate and general business confidence, with threats to projected revenues, profitability, liquidity and corporate growth and stated that so far 19 out of the 28 State-owned Enterprises (SOEs) are projecting losses up to GH¢1.55 billion for 2020.
On the performance of the economy in the first quarter of 2020, he announced Overall Real GDP growth rate of 6.8 percent, Non-Oil Real GDP growth rate at 6.7 percent, End-Period Inflation rate of 8.0 percent, Overall Fiscal Deficit of 4.7 percent of GDP, Primary Surplus of 0.7 percent of GDP and Gross International Reserves to cover at least 3.5 months of imports of goods and services
Ken Ofori-Atta disclosed that the Bank of Ghana has stepped up to the challenge and announced various policy measures to help support the economy and financial institutions in order to cushion the adverse impact of Covid-19 on the economy which he stressed has been possible because of the responsible and competent management of both the fiscal and monetary space since 2017.
He revealed that Government has additionally borrowed GHS 10 billion from the Bank of Ghana (BoG) and received a USD 1 billion rapid credit facility from the International Monetary Fund (IMF) as part of funds for the electricity relief package for Ghanaians for the remainder to be used to support the 2020 Budget.
According to the Minister, though targets set out by government at the beginning of the year were not met, he is positive of a robust turnaround in the economic fortunes of the country within the second half of the year.
Ofori Atta thus highlighted the review of some of the key macroeconomic targets announced in the 2020 budget read last year.