The year 2020 was challenging for countries all over the world of which Ghana is no exception.
The Government took some really difficult decisions including locking down some parts of the country at the outbreak of the pandemic last year as well as providing support to vulnerable individuals and businesses. These actions impacted the economy and business growth in general.
Although, some countries recorded negative growth in 2020, we achieved a positive growth rate of 0.9% albeit lower than the initial target. The year 2020 will remain in our history as one of the most challenging years that we have faced as a people.
Several businesses and individuals experienced economic hardships due to the adverse impact of the novel corona virus pandemic. Government in supporting businesses and individuals rolled out a number of stimulus packages including the CAPBuSS Fund, free water and electricity to lifeline consumers, distribution of food to households etc.
These initiatives had an adverse impact on government’s planned expenditure for 2020.
On 12 March 2021, the Minister of Parliamentary Affairs, Hon Osei Kyei-Mensah-Bonsu, presentedthe 2021 Budget Statement and Economic Policy (“the Budget”) under the theme ”Consolidation, Completion and Continuation” to Parliament on behalf of the President. This sets the tone for Government’s planned activities for the first year of the President’s second mandate.
The 2021 Budget is focused on activities targeted towards economic recovery following the pandemic. This is important to ensure that businesses and individuals are cushioned and supported to build more capacity for growth. The key priority areas of the Budget include delivering COVID-19 containment measures and vaccination, creating and sustaining jobs, implementing the GhanaCARES Programme, promoting entrepreneurship and wealth generation and making fiscal space for implementation of priority programmes.
Revenue mobilisation is crucial for the achievement of these priorities. Government will require innovative ways to raise additional revenue and contain expenditure levels so as to create the fiscal space to realise these targets and priorities.
Additionally, Government would have to continue its efforts in digitising its processes and systems to facilitate and sustain an enabling environment for businesses to thrive and survive in the face of fierce competition by the global community.
It is imperative that the private and public sectors find efficient and innovative ways to collaborate in building a stronger and better post pandemic economy.
At KPMG, we believe it is essential that the business community actively engages with Government to inform policy and foster the co-creation of interventions that support inclusive growth.