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Ghana’s budget deficit will exceed 5% of GDP in 2020, Information Minister Kojo Oppong Nkrumah has revealed.
This, he said, became apparent after a cabinet retreat led by President Akufo-Addo.
In informing the press on Tuesday, Oppong Nkrumah said the slide is the result of a massive cut in revenue and a reduction in trade as a result of the Covid-19 outbreak.
However, Finance Minister Ken Ofori-Atta was instructed to ensure that this slippage is kept to a minimum, Oppong Nkrumah said.
Offoase Ayirebi MP said that Mr. Ofori-Atta was instructed to develop a recovery program to save the situation.
The program, Oppong Nkrumah said, will be presented to Parliament after prior Cabinet approval.
Fiscal responsibility law
In 2018, the administration defended the approval of the Fiscal Responsibility Law, which aims to control government spending.
The law was promoted by the government as an instrument through which it will maintain fiscal discipline as the country leaves the IMF Program.
The Law stipulates two fiscal rules or objectives.
First, the annual budget deficit must not exceed 5% of GDP in cash, and second, the government’s primary balance must remain positive.
Projected growth
He also revealed that Ofori-Atta has defeated the initial projected growth of the economy from six percent to 1.5 to two percent.
Oppong Nkrumah also said: “All ministers had an opportunity to present an update on how Covid-19 is affecting their sectors and what would happen if it recovered from the slowdown caused by the pandemic.”
However, he pointed out that there would be priority areas; with the health sector being key.
Other priority areas, said the Minister, are: Roads, Education, Food and Agriculture and Security.
