President Nana Addo Dankwa Akufo-Addo has assured Ghanaians that his administration will continue to Acta within the Fiscal Responsibility Act tine ensure that the nation’s finances are protected.
The Fiscal Responsibility Act is an act of Parliament which requires the deficit to be kept at a maximum of 5 percent of Gross Domestic Product (GDP) but was suspended following the outbreak of the coronavirus pandemic given that government needed to spend more to save the economy from the ravages of the virus.
The Finance Minister Ken Ofori-Atta in his 2020 mid-year budget presentation stated: “From developments thus far, it is clear that the fiscal rules of a deficit not exceeding 5 percent of GDP and a positive primary balance enshrined in the Fiscal Responsibility Act, 2018 (Act 982) are neither feasible nor attainable targets in this emergency period of the COVID-19 Pandemic.
“The scale of damage and macroeconomic distortions caused by the pandemic is unprecedented in our country’s history. It may take a while to return to the pre- COVID-19 fiscal path. According to our revised fiscal framework, the economy is not likely to return to the 5 percent fiscal deficit threshold set in the Fiscal Responsibility Law sooner than 2024.
“Consequently, as required by section 3(3) of the Fiscal Responsibility Law, the government will within 30 days present before this august House the necessary documentation that supports the suspension of the fiscal rules and targets for this year 2020,” the minister added.
President Akufo-Addo speaking during this year’s presentation of New Year Greetings of members of the Diplomatic corps at the Peduase Lodge in the Eastern Region on Wednesday February 9 2022 said “As a result of government’s policies, the economy grew at the provisional rate of 5.2 per cent in the first three quarters of 2020.
“This growth is expected to be to sustained in the medium term.”
He added “The overall real GDP for the medium term is projected to grow at an average of 5.6 per cent and we remain committed to turning to the fiscal deficit target threshold as enshrined in the Fiscal Responsibility Act , ACT 982 from this year. We will continue along the line of promoting inclusive growth , encouraging investments and improving the standard of living of Ghanaians.
“It is encouraging for me and my party, the New Patriotic Party (NPP) to recall the rate of growth of the economy, 5.6 per cent against the the backdrop of the exceptionally difficult circumstances of the Covid era, is still considerably better than the 3.4 per cent we inherited from our predecessor’s administration.”