Strong fiscal regime needed after coronavirus pandemic – Economist

An Economist, Prof. Godfred Bopkin, says Ghana needs a strong fiscal regime to withstand external shocks after the Coronavirus outbreak.

According to him, government needs to critically look at taking advantage of its local production and manufacturing sectors to fortify its fiscal regime and revive the economy.

Speaking in an interview with GhanaWeb, Prof. Bokpin said; “The ability of middle-income countries like Ghana to jumpstart their economy post COVID-19 depends on a strong fiscal regime and I believe that is what the Finance Minister, Ken Ofori-Atta is critically looking at”

“But if we’re not careful to ask for a debt relief now and this phase of the pandemic is over, these same countries particularly China will benefit more by turning Africa practically into consumers once they’re able to turn a corner around this pandemic because China already has a competitive advantage,” he cautioned.

Meanwhile in an earlier report by Databank Research, Ghana’s fiscal deficit is expected to end this year at 4.9%± 0.5% of GDP which excludes Bank of Ghana’s bailout funds.

This is against the government’s initial target of 4.7% of GDP.

“Against our expectations of public expenditure and revenue dynamics, we forecast the overall fiscal deficit at 4.9% ± 0.5% by end-2020 (Government Target: 4.7% of GDP),” the report said.

Recently, Finance Minister, Ken Ofori-Atta, disclosed that Ghana’s economy will lose GH¢9.5 billion due to the outbreak of the novel Coronavirus pandemic.

According to him, this will represent 2.5 percent of Ghana’s revised Gross Domestic Product (GPD).

“Speaker, the total estimated fiscal impact from the shortfall in petroleum receipts, shortfall import duties, the shortfall in other tax revenues, the cost of the preparedness plan, and the cost of Coronavirus Alleviation Programme is GH¢9,505 billion,” he told Parliament earlier.

He added, measures are also required to close the fiscal gap of GH¢11.4 billion.