Coronavirus' devastating economic consequence visible in Q1 revenue outlook

There is every reason why Ghanaians are eagerly awaiting a return to normalcy so that they can engage in fruitful economic activity.

Figures published by the Bank of Ghana show a drastic decline in import duty during in the first quarter of the year, as a result of the outbreak of the COVID-19 pandemic.

The First Quarter Bulletin report shows taxes generated from international trade recorded GH¢829.7 million, lower than the budget target of GH¢1.2 billion, and still lower than GH¢1.4 billion recorded in same period of 2019.

Total import duty realized was 34 percent below target, and recorded a year on year decline in growth of 42.5 percent.

Taxes from international trade are not the only revenue generation sector negatively affected by the pandemic. According to the report, domestic goods and services tax also recorded a negative deviation of 18.2 percent against its programmed target of GH¢3.6billion.

This category of tax comprised excise duty and petroleum tax of over GH¢1billion, VAT collections of GH¢1.8 billion, National Health Insurance Levy of GH¢342.1 million, GET Fund Levy of GH¢344.6 million, and GH¢102.6 million from Communication Service Tax.

Additionally, taxes from income and property raked inGH¢4.4 billion during the first quarter, it however missed the budgeted target by 11.4 percent, but recorded a year on year growth of 21.1 percent.

Overall, government receipts (including grants) in the first quarter totaled GH¢10.3 billion, representing 2.7 percent of GDP).

This was lower than the target of GH¢13.9billion by 25.8 percent, and recorded a year on year growth of 3.2 percent.

It is however expected that the opening of borders next month (September 2020), as announced by the President, will significantly improve the revenue situation in the third quarter.

The extent of the economic havoc wrought by the pandemic crossed almost all sectors of the economy, and that is why those engaged in commerce have been eagerly awaiting to hear when borders would be open to engage in international trade.

A Chartered Economist/Business Consultant, Dr. Ebenezer Ashley has observed that significant economic gains made by developing, emerging and advanced economies in previous years are likely to be impacted adversely, if not eroded completely by the outbreak of the COVID-19 pandemic.

A substantial portion of China’s trade and business is concentrated in Africa. The quantum of trade, that is, total imports and exports between Africa and China in 2019 was estimated at over US$200 billion.