Osei Kyei Mensah-Bonsu
TOTAL GOVERNMENT Expenditure (including clearance of arrears) for this year is projected at GH¢113,750 million, equivalent to 26.2 per cent of GDP for 2021.
This represents a growth of 13.7 per cent above the outturn of GH¢100,052 million recorded in 2020.
“Mr. Speaker, Wages and Salaries are projected to amount to GH¢25,799 million and constitute 22.7 per cent of the Total Expenditure (including arrears clearance) for 2021. As a percentage of GDP, the wage bill is projected to be 5.9 per cent in 2021 compared to the 6.5 per cent recorded in 2020. Use of Goods and Services is also projected at GH¢5,967 million or 1.4% of GDP. This represents 5.2 per cent of the projected total expenditure (including arrears clearance).
Interest Payments are projected at GH¢35,864 million, equivalent to 8.3 per cent of GDP in 2021. Of this amount, domestic interest payments will constitute about 79.1 per cent and amount to GH¢28,368 million. Transfers to Statutory Funds as well as all other earmarked funds are estimated at GH¢18,081 million (4.2% of GDP), representing 52.2 per cent growth over the recorded outturn for 2020.
Capital Expenditure is projected at GH¢11,423 million (2.6% of GDP) in 2021, a decline of 5.5 per cent over the 2020 outturn. Of this amount, Domestic Financed Capital Expenditure is estimated at GH¢3,310 million (0.8% of GDP). An amount of GH¢8,112 million has been estimated for Foreign Financed Capital Expenditure and this will be funded by a combination of Project Grants and Loans.
Fiscal Deficit
According to the Parliamentary Affairs Minister, the 2021 fiscal operations will result in an overall fiscal deficit of GH¢41,298 million, equivalent to 9.5 per cent of GDP.
Financing of the fiscal deficit is expected to come from both domestic and foreign sources.
Net Domestic Financing will amount to GH¢25,424 million (5.9% of GDP) while Net Foreign financing will amount to GH¢15,870 million (3.7% of GDP) and will include a planned international capital market programme to raise up to US$5 billion, of which US$1.5 billion will be used to support the implementation of the 2021 budget and the rest for liability management.
A corresponding primary deficit equivalent to 1.3 per cent of GDP is also projected for the year.
BY Samuel Boadi