Separate coronavirus borrowing from 2020 budget borrowing - Seth Terkper

Former Finance Minister, Seth Terkper, has urged the government to come clean on its COVID-19-related expenditure, noting that government was spending allocated funds to fight the pandemic on unbudgeted expenditure.

Speaking at a press briefing in Accra on Friday, July 17, 2020, Mr Terkper suggests that an estimated GH¢6.5 billion more cash has been expended on items that were not budgeted for under coronavirus expenditure.

“The Minister went to Parliament and gave us the estimated cost of COVID-19 to be about 9.5 billion Ghana cedis. The financing which we secured purposely for COVID-19 – the $1 million IMF loan, which should be about 5.5 billion Ghana cedis, the World Bank support, the Stabilisation Fund withdrawal and other releases that we have got – amounts to about 10 billion Ghana cedis.

“I think I heard Minority say that it is about 16 billion Ghana cedis…it means that it is even higher than the cost,” he said.

Finance Minister, Ken Ofori-Atta, said in April this year that the country will lose more than GH¢9.5 billion due to the impact of the coronavirus pandemic on the economy.

Speaking in Parliament to brief the nation about the economic impact of the coronavirus pandemic, Mr Ofori-Atta said the country should prepare to lose more than GH¢9.5 billion from a shortfall in revenue from crude oil exports; non-oil tax revenue; import revenue; and further spending under the National Preparedness and Response Plan and the COVID-19 Alleviation Programme (CAP) to combat the pandemic.

In the 2020 budget, revenue from crude oil was projected with a price of $62.6 per barrel.

However, Brent crude oil prices took a nose dive to $22.9 as of (March 30, 2020, from $63.2 in November 2019, government estimates to lose more than GH¢5.6 million, even if the price climb to $30 per barrel.



But Seth Terkper told pressmen on Friday that although the estimated cost of the pandemic on Ghana’s economy could be higher, pre-COVID-19 financing means the country had secured enough to cushion the economy.

“The Bank of Ghana financing and other financing considered, we had secured enough for COVID-19 and so why were we getting those additional borrowings and the rest? The only explanation one can give is that…the deficit which we are being told was 3.5 and 3.7 were lower,” he said.

He added: “We had been pointing out this in the past but now we have an institution with more reputation, that is the IMF, adjusting our numbers so it means that the borrowing is now being done…to finance items that were not being disclosed; which is what the Fund itself and President John Mahama referred to as off-budget items.”

He wants the Finance Minister to take cognizance of IMF’s reviewed figures about the economy when he presents the Mid-Year Budget review later this week, that is on July 23.

Meanwhile, Mr Ofori-Atta has indicated that the Mid-Year Budget Review will focus on programmes aimed at fast-tracking the country’s economic recovery by extending support to businesses and industries that have been hit badly by COVID-19.