The Minister of Finance, Mr Ken Ofori-Atta, has projected Ghana’s economy to rebound strongly in 2021 at 5.7 per cent as a result of the implementation of the transformation phase of the Ghana CARES programme.
He said the Government intended to scale down the expected 2021 Fiscal Deficit from 9.6 per cent of GDP to the Mid-Year Review deficit of 8.3 per cent of GDP, reflecting improved revenues from anticipated pick-up of economic activities and a more rationalised public expenditure programme.
“With this path, we expect a return to the fiscal responsibility threshold of 5.0 per cent of GDP fiscal deficit and a positive primary balance earlier than the 2024 fiscal year previously announced.”
Mr Ofori-Atta said this when he presented the 2021 Expenditure in Advance of Appropriation from January to March, at Parliament House in Accra.
The House is expected to approve an amount of GH¢27.43 billion from the Consolidated Fund to meet expenditure in government services with respect of the period expiring three months of the Financial Year.
Mr Ofori-Atta said government had planted the seeds for a fast-paced and more inclusive recovery, recognising the role of capital and credit, with the certainty that the clean and revitalised financial sector would support recovery efforts and sustain growth.
“Mr Speaker, I want to assure this House that we will recover, we will revitalise, and we will transform the economy. We shall pivot off the AFCFTA Headquarters in Accra for Ghana to become a dynamic regional hub,” he added.
Mr ofori-Atta touted Government’s economic achievements, which he said grew at an average rate of seven per cent between 2017 and 2019 as compared with 2.8 per cent between 2014 and 2016.
He said government was able to reduce inflation from 15.4 per cent at end-December 2016 to 7.9 per cent by end-December 2019, the lowest since the Fourth Republic.
Mr John Jinapor, MP for Yapei Kasaugu and Member of the Finance Committee, reacting to the statement, said the Minister’s presentation showed an abysmal performance and did not provide up to date information on the 2020 figures.
He said instead of the Minister telling the people about the current economic issues he spent the day talking about of 2019 figures.
He said Mr Ofor-Atta, in the 2020 Budget, had the opportunity to report 2019 figures and also in the mid-year budget report, but chose to repeat the same issues on the floor of Parliament.
Mr Jinapor said in 2016 when Mr Seth Terkper came to Parliament to present the budget, he requested for about GHc10 billion for the Appropriation but today Mr Ofori-Atta was requesting for GHc27 billion, out of which over GHc10 billion would be used for debt servicing.
“Ghana is broke,” Mr Jinapor said.
He said in the latest October Report from the IMF Ghana’s debt to Gross Domestic Product was projected at 76 per cent from 56 per cent when Mr Ofori-Atta took over in 2017, adding that when a middle-income country crosses the 70 per cent debt to GDP threshold, it meant the country was hugely debt distressed.
“So, we don’t need the IMF to tell us Ghana is HIPC by the Minister’s own track record Ghana falls within the category of a HIPC country,” he said.
Mr Jinapor stated that the 2020 Budget had expected tax revenue of Ghc42 billion and yet debt serving alone, including interest payment and amortization, amounted to GHc38 billion, meaning that over 90 per cent of the monies collected as taxes was used to service debts even before salaries and other statutory payments are made.
“If this country is not broke or in a state of comatose then there is no word that can describe it,” he said.