Total expenditure by government for the 2020 fiscal year increased by 31.5 per cent due to the Covid-19 pandemic.
This is according to Fitch Solutions, research arm of Fitch Ratings.
Total expenditure incurred by government for 2020 according to Fitch Solutions is Ghs 92.2 billion. Government’s initial expenditure budget for 2020 was Ghs 84.5 billion which was later revised to Ghs 96.3 billion.
The 31.5 per cent increment in government expenditure translates into some Ghs 29 billion which is in sharp contrast to the some Ghs 11.2 billion noted by government to have been spent in the fight against Covid in the form of electricity and water subsidies to households and stimulus packages to businesses.
Fiscal deficit, Fitch also notes will end 2020 at 13 per cent of Gross Domestic Product (GDP).
According to Fitch Solutions, fiscal restraints would be particularly pronounced on the back of the country’s high debt and aggressive fiscal measures such as the passage of stimulus packages to mitigate the impacts of the pandemic on the economy.
“However, a robust cyclical recovery in revenues will allow for slight fiscal and economic adjustment efforts in the country. Nevertheless there will still be low spending growth of 6.2 per cent this year which is below the 2015 – 2020 average of 19.9 per cent suggesting there will be minimal spending on infrastructure like roads and hospitals this year,” Fitch added.