Ofori-Atta asks for GH¢27bn financing for 2021 Q1 budget

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YouStart Initiative risks failure if implementation is not rechecked
Ken Ofori Atta
  • Plans to borrow up to US$5bn from bond market
  • Pins economy’s future on GH¢100bn GhanaCares

By Obed Attah YEBOAH

Finance Minister Ken Ofori-Atta has asked Parliament to approve GH¢27.4billion to fund government’s budgetary needs for the first three months of next year, further asking the House to approve plans to borrow from the international capital market to finance expenditure.

Presenting the budget for the first quarter of 2021 in Accra – which has become a standing practice in election years due to the possibility of a change in administration, and to provide room for next government to implement its own plans for the remainder of the year – Mr. Ofori-Atta said the GH¢27.4billion will be used to cover expenditure on compensation of employees, ex gratia awards, interest and amortisation payments, transfers to Statutory Funds, critical programmes and goods and services, and capex allocations of MDAs.

Other programmes to be covered by the requested amount include what government calls Agenda 111 district and regional hospitals, which commenced in 2020 to ensure health facilities are available in all deprived places.

Commenting on how the budget will be financed, the minister said government will borrow from the international bond market – comprising the issuance of sovereign bonds of US$3billion with the option to increase it to US$5billion should market conditions prove favourable. Of this amount, he said, US$1.5billion will be used to support the 2021 budget and US$3.5billion for liability management.

GhanaCares to the rescue

On bringing the economy back to a resilient state – near pre-pandemic levels when growth averaged 7 percent for the years beginning 2017 – Mr. Ofori-Atta said he projects the economy to grow at 5.7 percent as a result of implementing the transformation and revitalisation phase of the GhanaCares programme, which is to invest GH¢100billion in the economy by supporting both small and large companies in some critical sectors.

Besides the GhanaCares programme, the finance minister also stated that the country will leverage opportunities which come from the Africa Continental Free Trade Area (AfCFTA) agreement to grow the economy.

“I want to assure this House that we will recover, we will revitalise, and we will transform the economy. We will pivot off the AFCFTA headquarters in Accra for Ghana to become a dynamic regional hub. We have planted the seeds for a fast-paced and more inclusive recovery. Recognising the role of capital and credit, we are certain that the cleaned-up and revitalised financial sector will support our recovery efforts and sustain growth,” he said.

The minister added that enough funds have been made available to provide the needed logistics for the December polls, assuring the business community that there is enough security to protect their investments.

“I want to reassure the House that despite set-backs from the pandemic, we are on-track to recover. We have made adequate budgetary provision to ensure that the elections are conducted in a safe and secure environment. Government has also instituted various security measures to ensure that we have peaceful elections and effectively contain all threats,” he said.

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