Gov’t expects $450m revenue shortfall due to COVID-19
Minister of Finance and Treasury Harry Kuma has told Parliament that Government revenue shortfall for 2020 is expected to be around $450m as a result of COVID-19.
Moving the 2020 Supplementary Budget today in Parliament Kuma said: “My Ministry conducted a midyear budget review of the first 6 months fiscal performance and projected that the revised revenue shortfall is expected to be around $450m in 2020. This projection could be higher than expected if the current situation continues to worsen or record a confirmed case in the coming months.”
Kuma said as a result the government has conducted a whole of government reprioritization exercise and secured a total sum of $156 million savings to fund the SIG COVID 19 Preparedness and Response Plan. According to minister, the approved savings were derived from 50 percent reduction from all discretionary and non-essential line items in recurrent other charges budget and 15 percent reduction to all ministries’ development projects except for economic and productive sectors.
He told Parliament that the government remains committed to economic growth and ring-fenced key productive and resources sector growth initiatives that are already in the pipeline to be delivered in 2020.
He adds that around $102 million was protected under the productive and resource sectors.
Kuma said the fiscal strategy in response to COVID 19 is on protecting essential services, reduction of wastage, reallocating resources to where it is most needed, and protecting growth.
Meanwhile Kuma said the overall year-to date fiscal performance over the last seven months showed an overall deficit of around $286 million from January to July 2020.
“This is significantly higher compared to a deficit of $9 million originally expected. Compared to the same period in 2019, overall fiscal position recorded a surplus of $122 million,” he told Parliament.
He states that revenue receipts recorded a shortfall of $236 million or 12 percent against an original revenue estimates of $1,975 million.
“Comparatively this was around $310 million or 15 percent less over the same period in 2019,” he said.