Ken Ofori-Atta, Finance Minister
The government has revised its fiscal deficit upwards from 4.2 per cent to 4.5 per cent of Gross Domestic Product (GDP), 0.5 per cent shy of the ceiling for the Fiscal Responsibility Act.
Finance Minister Ken Ofori-Atta told legislators in the 2019 mid-year budget review on Monday, 29 July 2019 that “the revised 2019 fiscal framework has carefully considered some measures in the second half of the year to safeguard the revised deficit target of 4.5 per cent of GDP”.
On the back of a slump in the oil sector, Mr Ofori-Atta noted that: “Real GDP growth rate has been revised downward from 7.6 per cent to 7.1 per cent on the back of a relatively larger GDP base for 2018, as well as the lower projected crude oil and gas volumes”.
The government, however, overshot its budget deficit for the first half of the year to 3.3 per cent of GDP higher than the targeted 2.9 per cent.
Revenue also experienced a shortfall in the first half of 2019 with an accumulated figure of GHS22.8 billion lower than the targeted GHS27 billion while spending was GHS34.2 billion lesser than the GHS36.8 billion target for the same period.
Meanwhile, Ghana’s debt has ballooned to GHS204 billion.
This confirms the prediction of the Minority in Parliament, who had earlier cautioned about the skyrocketing figures of Ghana’s debt, a situation they described as worrying.
The total public debt was GHS198 billion, as of March 2019, representing 57.5 per cent of Ghana’s Gross Domestic Product (GDP) according to the Bank of Ghana’s Summary of Economic and Financial Data – May 2019.
But Mr Ofori-Atta stated that: “The gross public debt stock in nominal terms stood at GHS204 billion (US$38.7 billion) as at end-June 2019, representing 59.2 per cent of GDP”.
He attributed the increased to frontloading the financing requirements for 2019 in the first quarter.
He added that: “Debt accumulation in the subsequent quarters is expected to ease downwards and stabilise”.
