Minister of Parliamentary Affairs and Leader of government business, Osei Kyei-Mensah-Bonsu has presented the 2021 National Budget and fiscal policy to the House which spells out full details of the economic recovery programme put in place by the Akufo-Addo government, that is the Ghana CARES (Obaatan Pa) programme.
He adds that the 100 billion cedis Obaatanba care programme will help to overturn the misfortunes of Covid-19.
Presenting an overview of the economy, Mr Kyei Mensah Bonsu gave details of how the economy fared last year in the midst of the COVID-19 pandemic and measures put in place to mitigate its impact.
He said last year, Ghana’s total public debt stock increased to 76.1 percent of GDP. The increased debt stock was on back of the COVID-19 pandemic, the financial sector clean-up among other factors.
Mr. Mensah-Bonsu said despite the impact of the pandemic, the rate of growth of the public debt has been lower compared to the previous government.
He said fiscal consolidation must be balanced to facilitate a quick recovery of the economy.
The Minister also announced that the COVID-19 pandemic has cost the state 19.7 billion cedis.
Government will therefore be introducing a COVID-19 Health Levy of 1 percent on VAT, Flat Rate Scheme and a 1 percent on National Health Insurance Levy as part of revenue measures to help the economy recover.
He says the financial sector clean-up and the refund of monies to depositors have restored investor confidence and protected the hard-earned savings of millions of Ghanaians. However, this came at a huge cost of over 21.0 billion cedis to Government.
He said Government will, therefore, introduce a financial sector clean-up levy of 5 percent on profit-before-tax of banks to help defray outstanding commitments in the sector.
The levy will be reviewed in 2024.
He also announced that government through Parliament will need to raise 5.5 billion cedis to complete asset industry bailout.
Touching on the theme of the budget, Mr Kyei Mensah Bonsu said the focus is completing all outstanding government projects.
He said the failure of successive governments to continue projects started by previous governments must stop.
On sanitation, Mr. Kyei Mensah proposed the institution of a 10 pesewas Sanitation and Pollution Levy to ensure sustainable sanitation management in the country.
On road projects, Mr Kyei Mensah Bonsu says to maintain the improvements on the country’s roads, Government will review existing road tolls and align them with current market rates.
This will form part of the framework for promoting burden sharing as efforts are made to transform the road infrastructure in a post-COVID era.
Government will suspend quarterly payment of vehicle income tax for the last quarter of this year.