COVID-19 will negatively impact 2020 fiscal stance – Fin Min
The Finance Minister, Ken Ofori-Atta has said that the 2020 fiscal stance will be negatively impacted by the novel Coronavirus (COVID-19).
According to him, even though events were still unfolding, preliminary analysis undertaken at the Ministry of Finance showed that the pandemic would result in significant shortfalls in petroleum receipts, import duties, other tax revenues, increased health-related expenditures and tight financing conditions.
Addressing Parliament on the economic impact of the COVID-19, the Minister said government programmed a crude oil price of $62.60 per barrel for the 2020 budget, consistent with the Petroleum Revenue Management Act (Act 815), but global crude oil price had declined significantly since the outbreak of the virus.
He said, “As of March 30, 2020, crude oil prices (Brent) were down to $22.9 per barrel from the December 2019 price of US$65.9 per barrel. Preliminary analysis shows that at an average crude oil price of $30 per barrel for year 2020, the government will register a shortfall in crude oil receipts amounting to GH¢5,679 million.
“Mr Speaker, the corresponding projected shortfall in Annual Budget Funding Amount (ABFA) is GHȼ3,526 million, while shortfalls in the Ghana Stabilisation Fund and the Ghana Heritage Fund are GHȼ1,058 million and GHȼ453 million, respectively. Projected shortfalls in transfers to GNPC is GHȼ642million,” he stated.
The Minister said the decline in import volumes and values, ad the slowdown in economic activities, would result in shortfall in both import duties and other tax revenues.
“Similarly, the projected slowdown in non-oil GDP as result of the coronavirus pandemic is expected to result in shortfalls in tax revenues (excluding oil tax revenues and import duties) amounting to GHȼ1,446 million, bringing the total estimated shortfall in non-oil tax revenues to GHȼ2,254 million,” he said.
By Maxwell Ofori / www.thechronicle.com.gh