Minister of Finance and Economic Planning Ken Ofori-Atta claimed the Ghana Enterprises Agency (GEA) under the Coronavirus Alleviation Programme Business Support Scheme (CAPBuSS) has provided 302,001 successful applicants across various sectors and regions with loans amounting to GHS 523.11 million.
According to him, the fiscal policies implemented to provide relief to Ghanaian citizens and businesses from the onset of the Covid-19 pandemic has led to an increase in total public debt.
He noted that the situation was made worse by the big drop in revenue collections last year and indicated that total revenues in 2020 fell by GHS 11.93 billion, equivalent to 3.1 percent of GDP, while total expenditures increased by GHȼ14.08 billion, equivalent to 3.7 percent of GDP.
The Minister made these disclosures when he appeared in Parliament on Wednesday 17th November, 2021 to deliver the Budget Statement and Government’s Economic Policy for the Fiscal Year ending 31st December 2022.
Ken Ofori-Atta was full of smiles when he announced that not a single Ghanaian public sector worker was laid off as a result of the impact of the pandemic on the public finances and Government has managed to pay them monthly.
He however acknowledged that despite these achievements, the President has had sleepless nights as he sought to ease the sufferings of Ghanaians, transform the economy to create jobs and share the expected wealth across all households
The Minister said the Budget is intended to building a sustainable entrepreneurial nation through fiscal consolidation and job creation which may be an uncomfortable transition but as a people who think deeply and must progress and become a people who also make things for ourselves and the world, we must embrace this challenge of becoming a vibrant entrepreneurial nation.
He said data on the performance of the economy as at end-September 2021 indicated that the implementation of the 2021 budget is largely on track and added that inflation declined sharply from 10.4 percent in December 2020 to 7.5 percent in May 2021, broadly reflecting well-anchored inflation expectations, exchange rate stability and favourable food prices.
Ken Ofori-Atta however explained that inflation picked up to 10.6 percent in September 2021 on account of shocks from domestic fuel price adjustments and increasing domestic food prices arising partly from climate-related factors, input supply bottlenecks, delayed harvests, and world food price increases and rose further to 11.0 percent in October, driven by non-food inflation.
According to him, fiscal adjustments to save lives and preserve livelihoods during the pandemic, although well-intentioned, have elevated global debt levels.
The Minister informed that a new Medium-Term National Development Policy Framework (MTNDPF), 2022- 2025 has been drafted to guide the medium-term economic recovery and transformation for the country.
This, he alluded, is consistent with the Ghana Beyond Aid agenda and is informed by the Government’s Covid-19 response strategy outlined in the Ghana CARES Obaatanpa Programme to enable the country build forward better.
The macroeconomic targets set for the medium-term (2022-2025): includes Overall Real GDP to grow at an average rate of 5.6 percent, Non-Oil Real GDP to grow at an average rate of 5.9 percent and End-December Inflation to be within the target band of 8±2 percent.
Others are Overall fiscal balance and primary balance to return to the Fiscal Responsibility Act threshold targets by 2024, that is, fiscal deficit of not more than 5 percent of GDP, and a positive primary balance and Gross International Reserves to cover at least 4 months of imports.
Meanwhile, the Budget projected Total Revenue and Grants for 2022 to rise to GH¢100.5 billion, equivalent to 20.0 percent of GDP, up from a projected outturn of GH¢70.3 billion, equivalent to 16.0 percent of GDP for 2021 while Domestic Revenue is estimated at GH¢99.5 billion and representing an annual growth of 44.0 percent over the projected outturn for 2021.
The increase in Domestic Revenue by 44.0 percent, according to the Finance Minister, is as a result of the impact of a major progressive tax policy, complemented by improvements in tax compliance and reforms in revenue administration
Regarding Resource Allocation for 2022, the Finance Minister said Total Expenditure (including clearance of Arrears) is projected at GH¢137.5 billion, equivalent to 27.4 percent of GDP.
The estimate for 2022 represents a growth of 23.2 percent above the projected outturn of GH¢111.6 billion, equivalent to 25.3 percent of GDP for 2021 with key drivers of expenditure growth including Capital Expenditure, funding of key Government flagship programmes, wage bill, and interest payments and added that government is going to judiciously work its way out of the debt situation
He states that on the expenditure side, for instance, interest payments and compensation payments alone amounted to GH¢48.7 billion which is 103.3% of total revenue and grants for January to September t, 2021 which two expenditure items absorb all the revenue collected for the period.
Pertaining to security, he said Government will develop a Critical Information Infrastructure (CII) Database, Government Digitalisation Initiative (GDI) database, and as well develop and implement a Cyber Risk Management Framework
He said Government has pledged to continue with the retooling of the Intelligence Agencies, the Military, and Departments and Agencies under the Ministry of Interior, especially the Police, with modern tools and software for improved communications and enhanced intelligence collection and analysis.