Business News Wed, 22 Jul 2020

What businesses, Ghanaians should expect in 2020 mid-year budget review

In accordance with Section 28 of the Public Financial Management Act, 2016 (Act 921), the Finance Minister, Ken Ofori-Atta will on Thursday, July 23 present his annual mid-year budget to Parliament.

The budget reading is to give an overview of the macroeconomic development of government over the past 6 months and that for the rest of the year.

GhanaWeb makes a list of items Ghanaians, business entities and firms should expect in the wake of coronavirus outbreak which has left a gap in the economy.

Stimulus Package for businesses and Industries

After the country was hit with the coronavirus pandemic, government rolled out GH¢1 billion stimulus package for small businesses to cushion them. Well, the Finance Minister has hinted that a similar initiative would be done for larger firms. This is to help mitigate the impact of COVID-19 on the economy as well as fast-track the country’s economic recovery.

Clarity on BoG’s GH¢10 billion loan

The Minister will also be expected to inform parliament about how government intends to pay back the GH¢10 billion it borrowed from the Bank of Ghana (BoG). Also, an explanation will be expected on the US$219 million transferred from the Stabilization Fund to the Contingency fund to fight the coronavirus.

Is govt still making use of oil money to fund Free SHS?

On the funding for Free Senior High School (SHS) initiatives, the finance minister is thus expected to brief Parliament and Ghanaians on how government has raised resources to fund the programme.

The opposition party had earlier raised concerns on government’s claim that the Free SHS programme is not funded with the country’s oil sector revenue. The NDC alleged that aside government taking from money from Ghana's oil cash fund - Annual Budget Funding Amount (ABFA), it has also borrowed US$2 billion from the International Monetary Fund (IMF) to keep the Free SHS programme up and running.

It is likely the finance minister in his mid-year budget presentation will address this claim.

Government of Ghana (GoG) must have the same figures with the IMF

The GoG must reconcile the country’s fiscal data with that of the International Monetary Fund (IMF). This comes after the continuous exclusion of exceptional expenses and arrears by the GoG in its fiscal reporting. It would be recalled that Ken Ofori-Atta while presenting the revised 2020 budget and fiscal gaps created by COVID-19 in March said the fiscal deficit and public sector debt were 4.7 percent and 58.0 percent of GDP, but IMF’ s Rapid Credit Facility (RCF) calculated did not tally that of government as their fiscal deficit and public debt were actually 9.5 percent and 68.7 percent respectively. The two gaps must be reconciled and Ghanaians must be filled in on the day of presentation.

Revenue Mobilization efforts for the next half of this year

The country is expected to lose about GH¢20 billion in revenue as a result of the COVID-19 pandemic, Finance Minister, Ken Ofori-Atta announced. Government therefore needs to provide innovative ways to serve as shock absorbers as the economy plunges due to COVID-19.

Some economists have however suggested they do not expect the Finance Minister to introduce any additional tax measures in the mid-year budget review but must rather provide stringent measures as to how government plans to widen the tax collection scope for revenue mobilization and generation.

By: Ernestina Serwaa Asante

Source: www.ghanaweb.com
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