COVID-19: Ofori-Atta raises alarm about liquidity; blames domestic market conditions
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COVID-19: Ofori-Atta raises alarm about liquidity; blames domestic market conditions

- The Finance Ministry has revealed that conditions in Ghana's domestic market have led to a fall in liquidity

- It added that Ghana's current fiscal gap is about GHC21.42 billion

- This, it said, is made up of Revenue Shortfall Impact of GHC15.85 billion and COVID-19-related expenses of GHC5.57 billion

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The Ministry of Finance has indicated that domestic market conditions in Ghana have reduced liquidity.

In a statement, it explained that preliminary assessments conducted have placed the current fiscal gap at about GHC21.42 billion.

The ministry added that it was made up of the Revenue Shortfall Impact of GHC15.85 billion and COVID-19-related expenses of GHC5.57 billion.

READ ALSO: Confirmed: Ghanaians to pay 100% more for fuel from June 2020 - Report

This, it added, was arrived at, taking into consideration factors such as the revenue shortfall impact, direct health-related spending and additional expenditures including programmed expenditures for the Coronavirus Alleviation Programme.

Other factors considered were the payment of outstanding government claims to health-related sectors of the economy such as the National Insurance Trust Fund and identified government intervention programmes,

Per a report by classfmonline.com, it added that the year 2020 began with sell-offs by non-resident investors, which has heightened these liquidity constraints.

For that reason, it went on, financing the residual gap would not only significantly increase domestic interest rates but would be counterproductive by denying the private sector access to cheaper sources of financing.

YEN.com.gh earlier reported that the Ministry of Finance has indicated that Ghana is likely to lose about GHC15.85 billion in revenue in the year 2020.

This, the ministry explained, is due to the economic impact of the coronavirus.

Information available shows that Ghana has targeted about GHC67 billion in revenue (tax and non-tax) for 2020.

READ ALSO: Gov't to outdoor "Ghana Cares Programme" to save the economy

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Source: Yen Ghana

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