COVID-19: Govt’ opens up about new 2020 budget; plans reliefs and postponements

COVID-19: Govt’ opens up about new 2020 budget; plans reliefs and postponements

- The finance minister, Ken Ofori-Atta, has opened up on government's decision to review the 2020 budget

- According to him, the economic impact of the coronavirus has led to the need for a change in plans to reflect the reality on the ground

- He added that the current inefficiencies would become serious challenges if they are not dealt with as a matter of urgency

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The minister of finance, Ken Ofori-Atta, has explained the rationale behind the plan to push for a new 2020 budget.

According to him, the government is taking a second look at all the fundamental assumptions made from the 2020 budget.

He added that this would help with the drawing of a new one which reflects the reality on the ground due to the economic impact of the coronavirus.

READ ALSO: COVID-19: Reports say African economies may recover only after 3 years

Per a report by classfmonline.com, Ofori-Atta explained that it is better to identify and eliminate inefficiencies before they become a greater challenge for the country.

He went on to say that together with other African ministers, he has been pushing for reliefs and postponements that would create the fiscal space to keep the continent’s finances in shape.

Ofori-Atta noted that the extraordinary circumstances have called for extraordinary measures and as such the government would soon approach Parliament for approval of the proposed budget.

Measures to be adopted, he indicated, include lowering the cap on the Ghana Stabilisation Fund (GSF) from the current US$300 million to US$100 million in accordance with Section 23 (3) of the Petroleum Revenue Management Act (PRMA).

Another strategy is to have an arrangement with the Bank of Ghana to defer interest payments on non-marketable instruments estimated at GHC1.22 billion to 2022 and beyond, as well as adjust expenditures on goods & services and Capex downwards by GHC1.248 billion, secure the World Bank DPO of GHC1.71 million and obtain the IMF Rapid Credit Facility of GHC3.145 billion.

YEN.com.gh earlier reported that Ofori-Atta hinted of a possible review of the 2020 budget in the wake of the spread of the coronavirus.

He stated that this has become necessary because of the economic effects of the outbreak of the coronavirus.

Ofori-Atta added that the effects of the coronavirus could push Ghana’s 2020 deficit to over 7% if care is not taken.

The finance minister passed the comment on the sidelines of a presentation to Parliament about the economic implications of the spread of the coronavirus.

READ ALSO: COVID-19: Gov't says partial lockdown will cause 1.5% fall in GDP growth

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Source: Yen.com.gh

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