2020 appropriation to increase by 12% as gov’t asks for GH¢11.8bn in supplementary budget
Adnan Adams Mohammed
Finance Minister, Ken Ofori-Atta is seeking to increase the
government’s total appropriation to almost GH¢110 billion for the year 2020as
it is seeking Parliamentary approval to spend about GH¢12billion more in the
supplementary budget presented to Parliament last week.
In the 2020 budget and economic policies statement of the
government presented in November 2019, the government presented a total
appropriation of GH¢98.0 billion, the unexpected global pandemic has pushed up
government’s expenditure beyond initial estimations prompting the request for
additional GH¢12.0 billion in appropriation.
The government, through the Finance Minister, explained that
the virus has not only plundered government’s revenues but has taken a heavy
toll on businesses with some requiring assistance to stay afloat. Should the
extra funds being requested by the Finance Minister be granted, it would bring
the 2020 the total Appropriation to GH¢109.9bn.
“Ghana has been hit with a double shock: a health pandemic
and a global economic recession. These have resulted in revenue shortfall of
GH¢13.6 billion and unanticipated but necessary expenditures of approximately
GH¢11.7 billion”, Mr Ofori-Atta told Parliament, adding that, “Whiles this
pandemic requires us to exceed the limits imposed by the Fiscal Responsibility
Act, we have had to make these major expenditures to protect the lives and
livelihoods of Ghanaians and sustain businesses.
The Minister further explained that, the supplementary
budget would go into areas such as utility tariffs reliefs for consumers, soft
loans for businesses, special allowance for front line workers, governance and
security, among others.
Ghana’s fiscal deficit is projected to hit 11.4% of GDP as a
result of a GH¢13.6 billion revenue shortfall occasion by the COVID-19 pandemic
and its attendant global economic downturn. This is above the 5% limit as
stated in the Fiscal Responsibility Act, 2018 (Act 982).
According to the Finance Minister, revenue mobilised in the
first half of the year was GH¢22billion which was 26 percent lower than the
estimated GH¢29.7bn for the period. Over the past five years, government has
struggled to raise enough domestic revenue despite its tax-to-GDP already
behind peers in the sub-region.
However, government’s total expenditure for the period,
GH¢46.3bn, was 11.5 percent more than what was projected in the 2020 budget
presented last year.
“Mr Speaker, 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 have to suspend our fiscal rule due to exogenous
factors. We intend to return to compliance with the FRA in the shortest
possible time”, the minister said.
Apparently, Mr Cassiel Ato Forson, Ranking Member on
Parliament's Finance Committee, has described as empty, the Government's
Mid-Year Budget Review presented by Finance Minister, Ken Ofori-Atta on
Thursday.
“There’s nothing in it for Ghanaians to be happy about,” Mr
Forson said, after the Minister had presented the budget review to the nation
through Parliament, in Accra.
He said government claimed to have spent GH¢11.1 billion to
address challenges brought about by the COVID-19 pandemic without giving breakdown
of expenditure.
“This is sad and unacceptable,” Mr Forson added, saying “we
thought the Minister would have used this golden opportunity to provide us with
some breakdown on what the GH¢11.1 billion was used for; unfortunately it is
all Bible quotations and nothing in the mid-year budget statement.”
According to Mr Forson, in the 2020 budget, the Government
informed the nation that it would borrow an additional GH¢18 billion, and
wondered why that figure had shot up to GH¢44 billion this year.
0 comments: