Addressing Parliament on the government’s plan in containing the virus, Mr Ofori-Atta explained that COVID-19 has led to a huge decline in revenue from the port, petroleum revenue receipts, and tax revenue.
The government had earlier estimated the total revenue and grants for 2020 to reach GHC67.0 billion.
But the Finance Minister said the pandemic will cause an increase in Ghana’s fiscal deficit.
“Preliminary analysis of the macro-fiscal impact of the pandemic shows that there is likely to be a significant slowdown in our GDP growth, significant shortfalls in petroleum revenues, shortfalls in import duties, shortfalls in other tax revenues, increased health expenditures, and tighter financing conditions with consequences on the 2020 Budget.”
He added that the country may see a fiscal deficit of 6.6% of revised GDP considering the fiscal measures being taken by the government.
“The corresponding primary balance is a deficit of 1.1% of rebased GDP. The resulting fiscal deficit as a percentage of GDP is in excess of the 5% threshold stipulated by the Fiscal Responsibility Act, 2018 (Act 982).”
He added that the primary balance is a deficit equivalent to 1.1% of GDP contrary to the positive balance prescribed by the Fiscal Responsibility Act.
Meanwhile, the Minister has said that the novel coronavirus pandemic will cost Ghana GHC9.505 billion.
“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 GHS9,505 million.”
In a related development, the Finance Minister, Ken Ofori-Atta, is calling for the amendment of the Petroleum Revenue Management Act (PRMA) to permit the government to use portions of the Ghana Heritage Fund to deal with the Coronavirus pandemic.