Osei Kyei-Mensah-Bonsu
GOVERNMENT HAS stated it is focused on developing some seven priority areas for this year.
Osei Kyei-Mensah-Bonsu, Majority Leader in Parliament, who made this known while delivering the 2021 Budget Statement and Economic Policy Friday in Accra, mentioned the priority areas as the Coronavirus containment measures and vaccination; the implementation of the Ghana CARES Programme, the consolidation and completion of existing programmes and projects, as well as the creation of fiscal space for implementation of priority programmes and projects.
Also he said Government was bent on looking at the creation and sustaining of jobs, security as well as entrepreneurship and wealth creation.
Revenue and Grants
Total Revenue and Grants for 2021 is projected to rise to GH¢72,452 million, equivalent to 16.7 per cent of GDP, up from an outturn of GH¢55,132 million, equivalent to 14.3 per cent of GDP recorded in 2020.
Domestic Revenue is estimated at GH¢70,987 million in 2021 and represents an annual growth of 31.7 per cent over the recorded outturn for 2020.
Of the total Domestic Revenue, Non-oil Tax Revenue will constitute about 74 per cent and amount to GH¢53,632 million, equivalent to 12.4 per cent of GDP, reflecting the impact of expected improvements in tax compliance and reforms in revenue administration
GDP Growth Target
Even though government witnessed a sudden shortfall in revenues amounting to GH¢13.6 billion and an unexpected and unavoidable rise in expenditures to the tune of GH¢11.7 billion, Mr. Kyei-Mensah-Bonsu indicated that government had targeted an overall real Gross Domestic Product (GDP) of 5.0 per cent for the financial year 2021.
According to him, government had projected a 6.7 per cent growth rate in non-oil revenue.
Mr. Kyei-Mensah-Bonsu, who doubles as Minister of Parliamentary Affairs, said inflation was projected to be 8.0% this year, adding that government had forecasted a 1.2 per cent primary deficit.
The non-oil real GDP is projected to grow at 6.7 per cent. In terms of sectoral growth, the agriculture sector is expected to grow at 4.0 per cent, the industry sector at 4.8 per cent, and the services sector at 5.6 per cent
Support For Jobless
The minister continued that government would support persons who lost their jobs as a result of the Coronavirus pandemic.
He also assured that the administration of President Akufo-Addo “will implement additional initiatives to drive recovery of our economy,” indicating, “We will continue the implementation of Agenda 111.”
He continued that “through Ghana Cares, we will expedite government digitisation agenda to achieve greater efficiency in our public sector service delivery.”
Abandoned Projects
The minister stated that government had planned to put an end to the abandonment of certain state infrastructure projects started by previous administrations in favor of new ones.
He said all ongoing state projects which started with public funds must be completed and should not be abandoned as had been the case in the past.
Commenting on the theme for the 2021 Budget Statement, ‘Completion, Consolidation and Continuation’, he said that was underpinned by the fact that over the years, every budget contained new projects, at the expense of old ones, which resulted in arrears.
Asset Management Companies Bailout
Out of an estimated amount of GH¢8.5 billion to help pay investors of the failed AMCs, Parliament approved an amount of GH¢3.1 billion in the 2020 Mid-Year Budget. At the end of December 2020, government had provided an amount of GH¢3.4 billion for the payment of validated claims to investors of 30 AMCs for which liquidation orders were obtained. This amount was in a combination of a three-year marketable bond of GH¢2.5 billion and a five-year zero coupon bond of GH¢915 million.
Permission To Clear GH¢5.5bn Arrears
“Mr. Speaker, for the Securities and Exchange Commission to fully settle investors of the remaining 17 AMCs, an amount of GH¢5.5 billion (1.3% of GDP) is required. For this reason, we have come to this august House once again to seek for your approval to raise an amount of GH¢5.5 billion in 2021 to complete the asset management industry bailout, including Gold Coast Fund Management Ltd (now Blackshield Capital Management), First Banc Financial Services Limited, Liberty Asset Management, Beige Capital Asset Management Ltd, Ideal Capital Partners Ltd, and Frontline Capital Advisors Ltd.”
Petroleum Revenue
He said the projected Petroleum Revenue for 2021 would amount to US$885.7 million. The total petroleum revenue is made up of Royalties (US$201.0 million), Carried and Participating Interest (US$524.9 million), Corporate Income Tax (US$158.5 million) and Surface Rentals (US$1.30 million).
“Mr. Speaker, in line with the PRMA, we will like to propose the allocation of the petroleum revenue as follows: Allocate US$283.00 million to GNPC for its Equity Financing Cost (US$179.33 million) and share of the net Carried and Participating Interest (US$103.67 million); allocate 70 per cent of the Benchmark Revenue of US$602.70 million (i.e. US$421.89 million) to ABFA; allocate 30 per cent of the Benchmark revenue (i.e. US$180.81 million) to the Ghana Petroleum Funds; and allocate US$126.57 million of the Ghana Petroleum Funds amount to the Ghana Stabilisation Fund and US$54.24 million to the Ghana Heritage Fund,” he said.
By Melvin Tarlue