Budget deficit missed in 1st seven months

Government missed its budget deficit target in the first seven months of 2016 as the government raised less revenue than forecast and exceeded spending plans for goods, services and capital expenditure.

An overall budget shortfall of 3.5 percent of gross domestic product was recorded from January through July as against the target of 3 percent.

The International Monetary Fund (IMF) this month revised Ghana’s budget deficit forecast for 2016 to 5.2 percent of Gross Domestic Products (GDP), from 4.8 percent of GDP in May.

The Ministry of Finance said this in the budget for the first quarter of 2017 in advance of an annual budget to be delivered after elections in December.

The budget is normally presented in November but given the presidential and parliamentary election on December 7, 2016, it will instead be tabled by next March.

Estimates of the Revenues and Expenditures of the Government for the 2017 Financial Year and the Expenditure in Advance of Appropriation, January to March, 2017 were presented to the House by the Finance Minister Seth Terkper and referred to the Finance Committee for consideration.

The report of the Finance Committee said the request had become necessary due to the “tight election calendar, which had made it difficult to come out with an Appropriation Act before the end of the year.”

Parliament authorised the withdrawal of GH¢10,999,108,191 from the Consolidated Fund, to meet the first quarter services and expenditure of government in 2017 in advance of the substantive budget for next year.

The amount would cater for estimates of the first quarter expenditure on essentials and other statutory payments. All other non-core expense would be deferred to the second quarter of 2017.

Out of the amount, GH¢3.8 billion would be utilised for the compensation of employees; GH¢164, 220,432 on goods and service, while GH¢1.2 billion would go into Capital Expenditure.

Interest payments would draw a total of GH¢1.8 billion from while GH¢2.3 billion would be utilised as grants to other government units.

An amount of GH¢18,456,296 would be paid for non-road arrears, GH¢151,078,450 would go into tax refunds and amortisation would take GH¢773,577,000 of the total amount.

A bill of 3.9 billion cedis for civil service salaries constituted the largest slice of the $2.75 billion total, according to the document.

Mr James Avedzi Klutse, Chairman of the Finance Committee told the House that the Finance Ministry had projected to collect a total of GH¢8.9 billion from both tax and non-tax revenue sources for the first quarter of 2017.

He said the deficit was to be financed through both domestic borrowing and external financing, including project and programme loans.