Finance Minister, Ken Ofori-Atta will later today, Thursday, July 23, present the 2020 mid-year budget review and supplementary estimates for the financial year in Parliament in accordance with Section 28 of the Public Financial Management Act, 2016 (Act 921).
This particular presentation will highlight the government’s plan on how the country is to recover from the shocks of the economy due to the withdrawal of advanced monies from the Contingency and Stabilisation Funds following the COVID-19 pandemic.
Mr. Ofori-Atta is also expected to use the opportunity to review some of the key macroeconomic targets announced in the 2020 budget read last year.
In April 2020, Parliament approved government’s request to withdraw an amount of GHS 1.2 billion from the contingency fund to finance the Coronavirus Alleviation Programme (CAP).
It also received a US$1bn rapid credit facility from the IMF as part of funds for the electricity relief package for Ghanaians whilst the remainder will be used to support the 2020 budget.
Additionally, the government borrowed GHS10 billion from the Bank of Ghana (BoG).
It also received a US$1bn rapid credit facility from the IMF as part of funds for the electricity relief package for Ghanaians whilst the remainder will be used to support the 2020 budget.
Already, the Minister has hinted the budget will also consider extending some support to businesses and industries hit by the outbreak of Coronavirus.
The presentation of the statement on the review of government projections for the 2020 financial year will be backed by a request for supplementary estimates.
Government projections for the 2020 financial year have largely been affected by the economic implications of the Coronavirus pandemic, but it hopes to restrategize to generate more revenue to revamp the economy.
Earlier this year, the Finance Minister announced that government will require some 9.5 billion cedis to fight the COVID-19 pandemic, a situation which may move the 2020 budget deficit to over 7 percent.
He also stated that this will be 2.5 percent of Ghana’s revised GDP, and there will be a “fiscal gap of GHS11.4 billion.”
Meanwhile, Parliament has decided not to allow the media to set up makeshift studios in the house to cover the budget review.
According to information from the Public Affairs Department of Parliament, the directive is in line with COVID-19 protocols put in place by the House.
Ahead of the presentation the Chamber of Independent Power Producers and Bulk Consumers, CIPDiB, has asked government to capture the payment of the about USD$1.4 billion debt owed them in the budget.
According to the Chamber, which is made up of the Sunon-Asogli Power (Ghana) Limited, BXC Solar Ghana, Cenit Energy Limited, Cenpower Generation Company Limited and Karpowership Ghana Company Limited, the continuous accumulation of the debt is forcing them to contract costly loans to sustain their generations.
CEO of the Chamber, Elikplim Kwablah Apetorgbor, says the Independent Power Producers (IPP) may shut down their plants if payment doesn’t happen soon.
“As the Minister of Finance prepares to present to the nation how he intends to fund government activities for the remaining months of the year, we would like this budget to address specifically the debt that the government owes us. It has become very critical because we are seriously bleeding to fund our operations. As at 30th June, 2020, the cumulative indebtedness to the IPPs is about USD$1.4billion and it continues to accumulate.”
