The Finance Minister, Ken Ofori-Atta, has assured Parliament that the government is working hard to get back quickly to the pre-pandemic fiscal and debt trajectory.
Presenting the 2022 Budget Statement and Economic Policy in Parliament on Wednesday, November 17, 2021, Mr. Ofori Atta disclosed that the fiscal policies implemented to provide relief during the pandemic have led to an increase in total public debt.
He said the situation was made worse by the big drop in revenue collections last year.
‘Mr. Speaker, let me assure the House that we are working hard to get back quickly to the pre-pandemic fiscal and debt trajectory. The fiscal policies implemented to provide relief during the pandemic have led to an increase in total public debt. The situation was made worse by the big drop in revenue collections last year. Total revenues in 2020 fell by GHȼ11.93 billion, equivalent to 3.1 percent of GDP, while total expenditures increased by GHȼ14.08 billion, equivalent to 3.7 percent of GDP.”
“As a result, a budget deficit of 11.7 percent of GDP was recorded against a target of 4.7 percent of GDP. Including the financial sector and energy sector-related expenditures, the budget deficit was 15.0 percent of GDP. GDP growth also dropped to 0.4 percent, compared to a projected growth rate of 6.8 percent before the pandemic. This growth, however, compares favourably with the sub-Saharan African average of negative 1.7 percent.”
He admitted that government is not oblivious of the economic challenges facing the country today.
”Mr. Speaker, we are under no illusions as to the economic challenges facing our country today. How to ease the sufferings of Ghanaians, transform the economy to create jobs, and share the expected wealth across all households, such as providing security and education, is what keeps the President awake at night.
“How to ease the sufferings of Ghanaians, transform the economy to create jobs, and share the expected wealth across all households such as providing security and education are what keeps the President awake at night,” the Finance Minister said.
He said President Akufo-Addo has charged all Ministers and other appointees to broaden the revenue base, keep a grip on expenditure, protect the public purse and at the same time build with urgency the needed infrastructure, collecting revenue, manage debt and expenditure commitments, and paying the bills to stimulate the economic activity over the next three years.”
”Mr. Speaker, we know we can get the job done. It is well-known that prior to the pandemic, we had stabilised and turned around the economy between January 2017 and March 2020. We had reversed the worrying economic trend we inherited and placed the country on a path of fiscal sustainability and growth. We doubled the economic growth rate from 3.4 percent to an average of 7.0 percent between that period.”