Contradictions identified in gov’t Covid-19 expenditure amount

President Akufo-Addo and Finance Minister Ken Ofori-Atta
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President Nana Akufo-Addo in his State of the Nation address Wednesday, March 30, disclosed that the government has so far spent GH¢17.7 billion in containing the coronavirus pandemic.

This, according to him, constitutes 4.6 percent of the country’s Gross Domestic Product (GPD).

He said part of the money was used to provide nearly five million (5 million) households and over ten million (10 million) people with electricity and water subsidies at the time they were most needed.

“In all, data from the Ministry of Finance tells us that an amount of GH¢17.7 billion (or 4.6% of GDP) has been spent in containing the pandemic since 2020,” he added.

This comes barely a year after the 2021 budget was read by the Majority Leader and Minister for Parliamentary Affairs, Osei Kyei-Mensah-Bonsu. The Finance Minister, Ken Ofori-Atta, was indisposed at the time and was seeking treatment for post Covid-19 complications.

On Appendix 12B of that budget, allocation for Covid-19 spending stood at GH¢19.3 billion and utilization stood at GH¢18.1 billion. Note that this budget introduced some new taxes including a Covid-19 Recovery Levy of 1%.

Appendix 12B of the 2021 Budget: Actual Covid-19 funding is 1.7 billion cedis while Deficit Financing is 16.5 billion cedis.

Soon after the budget was read, Information Minister Kojo Oppong Nkrumah, in an interview with Evans Mensah on PM Express, reiterated the GH¢19 billion expenditure on Covid-19 and used same to justify why it had become necessary for the government to impose a Covid-19 Recovery Levy.

“We have had to spend (the fiscal impact of Covid-19) about ¢19 billion to respond to Covid and we did not necessarily charge the Ghanaian for it, we had to borrow, we had to take money from the Bank of Ghana to deal with the Covid pandemic. That’s why today, articles are being published around the world commending Ghana as one of the best response countries. But that 19 billion cedis has to be paid for at some point.

“The government had to borrow money, a fiscal impact of about 19 billion to make all of those expenses happen. In addition to that, there are going to be expenses in the medium term because of Covid. The government is asking a question, can we continue to accommodate this Covid black hole in this already widening gap of our finances or do we have to introduce a revenue handle that can take care of it. The government comes to agree that with the greatest of respect, can we take 1% VAT to pay for that so that Covid does not become an ever-burdening expenditure item for us,” he explained.

Subsequently, Joy News did an analysis of the 2021 budget and reported that, contrary to the claims by the government that 19 billion was spent on Covid-19, only 1.7 billion was actually spent on Covid-19.

This report was rebutted by the Ministry of Finance in a rejoinder that justified the government’s GH¢19 billion figure.

”The Ministry’s attention has been drawn to media publications, claiming that Government spent GH¢1.7 billion on the Covid-19 pandemic, even though Government says its spent GHS19 billion. The Ministry hereby informs the general public that these publications are incorrect. The GH¢1.7 billion reflects expenditures on only two items under the Covid-19 related expenditures, namely, Covid-19 Alleviation Programme 1 (CAP1) and Emergency Preparedness and Response Plan 1”, parts of the Ministry’s Friday 19 March, 2021 rejoinder read.

The disparities in the figures by President Akufo-Addo in the State of the Nation Address and the figures contained in 2021 Budget as well as those quoted by the Information Minister, raise legitimate questions about the government’s reporting on Covid-19 expenditure.

By 3news.com|Ghana

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