Government is hoping to achieve a cash basis budget fiscal deficit of 9.5 per cent by the end of 2021.
Recorded fiscal deficit at end-December 2020, reached 11.4 per cent of Gross Domestic Product (GDP), with total public debt reaching Ghs 291.6 billion – 76% of GDP.
The 9.5 per cent budget fiscal deficit target according to Caretaker Finance Minister, Osei Kyei Mensa-Bonsu, forms part of government’s medium-term macroeconomic objectives to return the country’s fiscal path to the fiscal deficit ceiling of 5 percent of GDP as mandated by the Fiscal Responsibility Act.
Other macroeconomic targets for 2021, Mr Kyei Mensa-Bonsu pointed out included; overall real GDP growth of 5%, non-oil GDP growth of 6.7%, end-2021 inflation rate of 8%, primary deficit of 1.2% of GDP and gross international reserves of not less than 4 months of import cover.
In terms of sectoral growth, the agriculture sector is expected to grow at 4.0 percent, the industry sector at 4.8 percent, and the services sector at 5.6 percent.
Presenting the 2021 Budget Statement and elaborating government’s fiscal operations for the 2021 fiscal year, Mr Kyei Mensa-Bonsu stated fiscal consolidation measures of government in 2021 will be carefully balanced with the provision of targeted fiscal stimulus aimed at cushioning the impact of COVID-19 on businesses and the economy such as through the Ghana CARES “Obaatan Pa” Programme.
He also noted that government will pursue revenue-enhancing measures with a focus on deepening tax collection as well as rationalising expenditures through the implementation of tighter expenditure control systems.
“Mr. Speaker, in the medium-term, we will pursue revenue-enhancing measures with a focus on deepening our digitalization agenda both on transactions of goods and services as well as on the tax collection machinery as part of measures to broaden the tax base and rope in a lot more eligible taxpayers into the tax net. Expenditures will be rationalised through the implementation of tighter expenditure control systems with a more efficient procurement system to ensure value for money. We will also pursue structural reforms in public financial management system to improve efficiency in public service delivery,” he stated.
