Ghana lost GHS13.6 billion in revenues as a result of the COVID-19 pandemic, Minister of Parliamentary Affairs, Osei Kyei-Mensah-Bonsu has said.
Presenting the 2021 budget statement and economic policy on the floor of Parliament on Friday, March 12, 2021, the Minister said the pandemic resulted in economic challenges such as an overall budget deficit which consequently led to shortfalls in government revenues.
“Overall budget deficit on a cash basis was 11.4% of GDP. The primary balance recorded a deficit of 5.3% of GDP. Annual growth of outstanding credit to the private sector moderated from 9.39% in December 2019, to 0.17% in December 2020. This unprecedented crisis, for which we had no pre-existing guidelines, triggered a sudden shortfall in government revenues amounting to GHS13.6 billion and an unexpected, unavoidable rise in expenditures of GHS11.7 billion.”
Based on projections from the International Monetary Fund (IMF), Mr Kyei-Mensah-Bonsu expects a revival of Ghana’s economy.
“IMF data indicates that the global economy is expected to grow at 5.5%. This reflects an expected positive turnaround. Output gaps are not expected to close until after 2022. Inflation is expected to remain subdued for 2021 and 2022.”
He added that the GHS100 billion investment into the Ghanaian economy will also revitalize the economy.
“Mr. Speaker, pursuing the GHS100 billion Ghana CARES Obaatan pa programme allows us to address the challenges and also seize the opportunities created by COVID-19 for socio-economic transformation. This programme will foster closer collaboration with the private sector, labour, faith-based organizations and development partners to complement efforts in the revitalization and growth agenda,” he said.
In a bid to ensure the revival of the economy, Cabinet recently introduced the Post COVID-19 Economic Recovery Programme, which will ensure that the government pursues policies and programmes that will build a robust economy and create more jobs.
The Ghana COVID-19 Alleviation and Revitalization of Enterprise Support initiative, is also another programme aimed at stabilising, revitalizing and transforming Ghana’s economy over a three-year period.
It is sequenced in two phases; a Stabilisation phase that runs from July 2020 to December 2020 and a medium-term revitalisation phase from 2021-2023.