Friday, 17 September

We’re committed to achieving 9.5% fiscal deficit target – Ofori-Atta

The banks have been resilient

Finance Minister Ken Ofori-Atta has said the Akufo-Addo government remains committed to achieving the 2021 fiscal target of 9.5 per cent.

Presenting the mid-year budget review to parliament on Thursday, 29 July 2021, Mr Ofori-Atta said in the 2021 budget presented to the house in March this year,  the government  indicated  its  commitment  to  mitigate  the  impact  of  the pandemic  with  a  view  to  returning  the  economy  to  “strong  and  sustainable growth,  while  protecting  lives  and  livelihoods”.  

The government, he recalled, also  did  indicate that the medium-term fiscal framework will be anchored on debt sustainability, given  the  exigencies  of  the  time,  the  elevated  debt  levels,  the  limited  fiscal space,  and  the  structural  budget  rigidities.  

Consequently,  he noted, the  2021  fiscal framework presented in the 2021 budget statement set the overall fiscal deficit for  2021  at  9.5  per cent  of  GDP  with  a  corresponding  primary  deficit  of  1.3 per cent of GDP.

This follows a fiscal deficit outturn of 11.7 per cent of GDP in 2020  reflecting  the  impact  of  COVID-19  pandemic  compared  to  the  revised target of 11.4 per cent of GDP for the year, Mr Ofori-Atta noted. 

So far, he said, “the implementation of the 2021 budget from January to June has been successful”.

“We remain fully committed to achieving the fiscal deficit target of 9.5 per cent of GDP for the year in order not to derail from the objective of returning to the Fiscal Responsibility Act (FRA) threshold of ‘5 per cent of GDP’ for the fiscal deficit and a ‘positive’ primary balance by 2024”, he noted.  

Mr Ofori-Atta added that the provisional fiscal data for January to June 2021 show that “we are on track with the target on the fiscal balance for the period”.

“Total revenue and grants amounted to GH¢28,304 million (6.5% of GDP), against a programmed target  of  GH¢32,362  million  (7.5%  of  GDP)”, he said.  

For  the  same  period,  Mr Ofori-Atta said “total expenditure, including the clearance of arrears, amounted to GH¢50,619 million (11.7% of GDP), against a programmed target of GH¢55,088 million (12.7% of GDP)”.

This resulted in an overall fiscal deficit of GH¢22,315 million (5.1 of GDP), against a programmed target of GH¢22,726 million (5.2% of GDP), he explained.