According to Ghana’s Finance Minister Ken Ofori Atta, the COVID-19 pandemic has brought a significant challenge to the country’s economy resulting in an increment of the projected fiscal deficit of 11.4% of the GDP for the year 2020.
Presenting the 2020 mid-year budget review, the Finance Minister noted that, the impact of COVID-19 on the country’s economy forced the government to take certain decision to ensure a stable economy.
“Mr. Speaker, Ghana has been hit with a double shock: a health pandemic and a global economic recession. These have resulted in a revenue shortfall of GH¢13.6 billion and unanticipated but necessary expenditures of approximately GH¢11.7 billion. This will result in a projected fiscal deficit of 11.4% of GDP. This is above the 5% limit as stated in the Fiscal Responsibility Act, 2018 (Act 982)” he said.
He further stated that “Ghana is not unique in this regard. The pandemic has caused other countries including the 26 countries in the EU, Brazil, Jamaica, Costa Rica, etc. to suspend their fiscal rules in 2020 in light of their sharply increased fiscal deficits”.
“Mr. Speaker, given our history of fiscal rectitude, it is with great difficulty that we are having to suspend our fiscal rule due to exogenous factors. We intend to return to compliance with the FRA in the shortest possible time” he added.
Meanwhile, the Communication Service Tax which is currently 9% is going to be reduced to 5% by the government, This was made clear by the Finance Minister today Thursday 23rd July 2020 in parliament.
By Amos Ekow Coffie | talksafrica.com