The Minister of Finance, Ken Ofori-Atta, on Thursday requested Parliament to approve more than GH¢11. 8 billion to support government’s expenditure for remaining months of 2020.
The Minister, who made the request in his mid-year budget review, said the coronavirus pandemic had led government to breach the Fiscal Responsibility Act,
The Act imposes a cap of five per cent of GDP on fiscal deficit but the challenges of the pandemic had necessitated a breach with the deficit now projected to reach 11.4 per cent of Gross. Domestic. Product (GDP)
“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,” Mr. Ofori-Atta said.
Government revenue projections for 2020 was affected by slowdown in economic activities as a result of the impact of the COVID-19 pandemic, shortfalls in domestic direct and indirect taxes, and custom taxes, estimated at GH¢5.089 billion.
There was also a reduction in petroleum revenue mainly due to decline in crude oil prices (from
US$62.6 per barrel used in the 2020 budget to US$39.1 per barrel) as a result of the pandemic.
Mr. Ofori-Atta said the supplementary budget would assist government to implement various initiatives to revive the economy.