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.