Finance Minister, Ken Ofori-Atta, has projected a fiscal deficit of not less than GH¢10 billion from January to March 2021.

To shore up this deficit, the Minister told Parliament on Wednesday, October 28, 2020, that he intends to borrow from the international market in a bid to support the 2021 budget and liability management.

“Mr Speaker, for the purposes of the 2021 Expenditure in Advance of Appropriation, we have projected the 2021 first-quarter total revenue and grants at GH¢13.3 billion while total expenditure including the clearance of arrears is projected at GH¢24.0 billion. This results in the projected fiscal deficit of GH¢10.7 billion for the period,” he announced in Parliament.

He said he intends to turn to the international capital market, precisely the issuance of sovereign bonds of $3 billion (or $ 5 billion if market conditions are good).

“Out of the amount to be raised, $1.5 billion will be used to support the 2021 budget and $3.5 billion for liability management,” he said.

The government, led by Nana Addo Dankwa Akufo-Addo, has been criticised for failing to maintain fiscal discipline since it took office in 2017.

Fitch, an international rating agency, has forecasted a fiscal deficit to GDP of 10.5% for Ghana in 2020, which is more than twice the 2019 target of 4.7 per cent.

Analysts criticise widening fiscal deficit because it suggests a lack of fiscal discipline and usually forces governments to borrow from both the domestic and international markets to make up for the shortage in spending targets.