Ken Ofori-Atta
Government says it plans to clear arrears by the end of 2019 owing to the outcome of an audit of the outstanding commitments as at the end of 2016.
It said it will institute stringent measures to prevent the accumulation of new ones.
Ken Ofori-Atta, Minister of Finance, who disclosed this on Monday in Parliament when he presented his mid-year review of this year’s budget, said: “To this end, the clearance of arrears will be expedited in the second half of the year to ensure that the risk that these arrears pose, especially to financial sector, is minimized.”
CAPEX
Mr Ofori-Atta indicated that capital expenditure (CAPEX) amounted to GH¢2.4 billion (1.2 percent of GDP), 81.8 percent of the period target of GH¢2.9 billion (1.4 percent of GDP).
Foreign-financed capital spending was, however, higher than the target due mainly to improved project loan disbursements.
At the end of the 2016, he said new arrears of some GH¢5.0 billion had been accumulated, bringing the total arrears that should be cleared to GH¢7.0 billion.
“As I indicated in the 2017 Budget Statement, we are undertaking an audit of these arrears, which is expected to be completed by October 2017.”
Expenditure
He said total expenditure, including payments for the clearance of arrears amounted to GH¢23.0 billion (11.3 percent of GDP), as against a target of GH¢27.6 billion (13.6 percent of GDP).
“Budget allotments for the period were reviewed to match the revenue inflows to ensure that our fiscal objectives and targets were not derailed.
“Wages and salaries for the period amounted to GH¢6.8 billion (3.4 percent of GDP), which was within the target of GH¢6.9 billion.”
He also said expenditures on the use of Goods & Services amounted to GH¢854.6 million (0.4 percent of GDP) as against the target of GH¢1.4 billion (0.7 percent of GDP).
This represents 61.4 percent of programmed target for the period.
Interest paid
According to the Minister, interest payments amounted to GH¢6.7 billion (3.3 percent of GDP) as against a target of GH¢7.1 billion (3.5 percent of GDP), 5.5 percent lower than the target.
“Our liability management programme, including re-profiling (extending maturity profile of domestic debt by issuing longer-dated instruments to replace shorter-dated instruments, thereby reducing annual debt servicing cost and roll over risk is expected to provide provisional savings of GH¢612 million. “Domestic interest payment for the period amounted to GH¢5.3 billion against a target of GH¢5.7 billion, indicating potential savings of GH¢374.6 million for the period, arising mainly from the re-profiling of maturing domestic debt.
Government units
He said grants to other government units, which included the transfers made to statutory and earmarked funds, fell below target mainly because of lower domestic revenues.
By Samuel Boadi