President Nana Akufo-Addo
The President Nana Akufo-Addo’s Government has reaffirmed its commitment to safeguard Ghana’s Macro-fiscal gains over the last three years.
Finance Minister, Ken Ofori-Atta, who is presenting 2020 Budget Statement and Economic Policy on the floor of Parliament, made the pledge on behalf of Government.
He said emphatically that “Government remains committed to safeguarding the macro-fiscal gains that we have achieved over the last three years in the management of the nation’s public finances.”
The implementation of the Fiscal Responsibility Act, the establishment and operationalisation of the Fiscal Responsibility Advisory and Financial Stability Councils, he reverse, have complemented several other institutional and structural reforms to strengthen fiscal discipline and ensure irreversibility of policies.
According to him, over the first nine months of the 2019 fiscal year, provisional fiscal data indicates that the fiscal deficit arising from Government’s fiscal operations was 4.5 percent of GDP on cash basis.
“This compares to a deficit target of 4.1 percent of GDP for the period. The higher-than-programmed fiscal deficit resulted mainly from revenue underperformance. Although expenditures were also below target, the expenditure execution rate was higher than revenue execution rate,” he said.
Total Revenue
He disclosed that total revenue and grants for the period, amounted to GH¢36.3 billion (10.5% of GDP).
“The outturn represents a per annum growth of 9.2 percent despite a 13.6 percent shortfall relative to the target of GH¢42.0 billion (12.1 percent of GDP),” he reported.
He added that the general underperformance of tax revenue mainly stems from shortfalls in International Trade taxes and on Income and Property taxes.
“The shortfall in international trade taxes, which consist of Import Duty and Levies, External VAT, and Customs National Health and GETFund levies, resulted from lower import volumes, high admittance of imported goods into the zero-rated and/or tax-exempt import brackets and the lower tariff bands, up to the 10 percent tariff levels,” he explained.
Total Expenditure including arrears clearance amounted to GH¢51.9 billion (15.1% of GDP) compared to the target of GH¢56.1 billion (16.2 percent of GDP). Except for Interest Payments, all expenditure line items were contained within their respective targets, according to the Minister.
Following Government’s fiscal operations, the overall fiscal balance on cash basis resulted in a deficit of GH¢15.7 billion (equivalent to 4.5 percent of GDP) against the target of GH¢14.2 billion (or 4.1 percent of GDP), he said.
“The higher-than-programmed financing (especially from domestic sources) stems mainly from the frontloading of financing requirements to meet Government expenditures and other debt service obligations, including for the settlement of uncovered Government auctions following substantial revenue shortfalls,” he said.
The Primary Balance for the period was a deficit of GH¢916 million (0.3% of GDP) against the targeted Primary Surplus of GH¢201.7 million (0.1% of GDP), he stated.
Outlook for End-year 2019
Based on the provisional fiscal outturn for the first nine months of the year, he noted, revised projection for the year resulted in total revenue and grants of GH¢54.6 billion (15.8% of GDP).
” This projection represents a 7.4 percent shortfall relative to the 2019 revised annual budget target of GH¢58.9 billion (17.0% of GDP),” he added.
BY Melvin Tarlue