Finance Minister, Ken Ofori Atta has been asked by the parliament of Ghana to justify the suspension of the Fiscal law for the 2020 financial year in parliament today.
The Minister served notice of the suspension of the law in his Mid-year budget review presentation due to the impact of the COVID-19 pandemic on government’s projections.
Dr Anthony Akoto Osei, Minister for Monitoring and Evaluation and Member of the Economic Management Team, has emphasized that the Minister is within his rights to suspend the law under certain conditions.
“He put a statement in the budget that he’s going to suspend it, but the way the law is he’s to bring justifications. He’s brought it and the committee has reviewed it and it is proper so he’s coming to report on it,” he stated.
The mid-year budget review has raised a deficit target to 11.4 per cent of GDP by the end of this year from an earlier target of 4.7 per cent, reflecting an additional 6.7 per cent of GDP attributable to both direct and indirect COVID-19 impact, as the estimate of revenue and grants have been revised downwards and expenditures and arrears clearance have been revised higher.
The primary fiscal balance is projected at 4.6 per cent of the Gross Domestic Product from an initial target of a surplus of 0.7 per cent.
The fiscal deficit path leads to a rise in the stock of public debt to 67 per cent of GDP at the end of June from 62.4 per cent in December 2019.
The Bank of Ghana earlier indicated that the 2021 budget should focus on measures to return to the path of fiscal consolidation to help return to macroeconomic stability.
The Fiscal Responsibility Act makes it an offence for the Annual Budget Deficit to exceed 5% of the Gross Domestic Product (GDP).
Paa Kweku Eshun|Talksafrica.com