Minister for Information Mr Kojo Oppong-Nkrumah has indicated that Ghana’s budget deficit is likely to exceed 5% of GDP in 2020.
This, he said, became obvious after a Cabinet retreat headed by President Nana Akufo-Addo at the weekend.
At a media briefing in Accra yesterday, Mr Oppong Nkrumah said the slip is as a result of a massive cut in revenue and reduction in trade as a result of the COVID-19 pandemic.
According to him, the Minister for Finance, Ken Ofori-Atta has however been instructed to ensure that this slip is contained to the barest minimum.
The Ofoase-Ayirebi MP said the Finance Minister has also been instructed to put together a recovery programme to save the situation.
The programme, Oppong Nkrumah indicated, will be submitted to Parliament after prior approval by Cabinet.
Fiscal Responsibility Act
In 2018, the administration championed the passage of the Fiscal Responsibility Act which aims at checking spending by governments.
The Act was touted by government as an instrument through which it will maintain fiscal discipline as the country exited the IMF Program.
The Act stipulates two fiscal rules, or targets.
First, the annual budget deficit should not exceed 5% of GDP on a cash basis, and second, government’s primary balance should stay positive.
He also disclosed that Ofori-Atta has beat down the initial projected growth of the economy from six percent to 1.5 to two per cent.
“All Ministers had an opportunity to present an update on how the Covid-19 is affecting their sectors and what if would take to recover from the slowdown occasioned by the pandemic”, Mr Oppong Nkrumah.
He, however, noted that there would be priority areas; with the Health sector being key.
Other areas of priority, the Minister said are: Roads, Education, Food and Agriculture and Security.