Question

The government of Ghana through the Minister of Finance presented the 2020 Budget statement to Parliament in November 2019.The Coronavirus Disease 2019 (COVID -19) pandemic that has hit the world has impacted on global economy including Ghana, thus affecting our macroeconomic targets in the budget statement presented in November 2019. The Minister of Finance presented a statement to Parliament on the economic impact of COVID – 19 pandemic on the economy of Ghana and the way forward at the end of March, 2020.

Discuss five (5) key impact of the COVID-19 on the achievement of our fiscal policy targets for the year 2020 by comparing the original budget statement to the one presented after COVID- 19.

Answer 1

Five impact of covid-19 on achievement of fiscal policy target for year 2020 would be as follows-

A. There would be expectation of less collection of taxes, because of disposable income of people going down due to coronavirus concern.

B. There would be expectation of less allocation of resources, to various social services scheme, because the collection would have been lower on the part of the government.

C.there would be an expectation of deficit in the budget because government would be more expected to provide various kinds of the scheme, which would be providing stimulus to different group of people in order to stabilize the demand in the economy.

D. Government will be needing to do direct tax cuts in order to boost the income of various section of society to maintain an equity between them.

E.government will also be need to liberalise various kinds of tax structure, so that the tax structure should be supportive in nature to various group of individuals.