Ken Ofori-Atta
FINANCE MINISTER Ken Ofori-Atta wants Parliament to endorse a spending ticket of GH¢137.5 billion for 2022 after projecting to raise GH¢100.5billion in total revenue and grants.
The expenditure is equivalent to 27.4 percent of the Ghana’s gross domestic product (GDP).
BY the foregoing, the projected 2022 revenue and expenditure will create an overall fiscal deficit of GH¢37.0 billion, equivalent to 7.4 per cent of GDP.
It represents an increase of 23.2 per cent over the projected outturn of GH¢111.6 billion, equivalent to 25.3 per cent of GDP for 2021.
Minister of Finance Ken Ofori-Atta disclosed this yesterday in Accra.
He said the revenue and grants were projected to rise to an equivalent of 20.0 percent GDP, up from a projected outturn of GH¢70.3 billion, equivalent to 16.0 per cent of GDP for 2021.
Domestic revenue, he said, was estimated at GH¢99.5 billion and would represent an annual growth of 44.0 per cent over the projected outturn for 2021.
The key drivers of expenditure growth include capital expenditure, funding of key government flagship programmes, wage bill, and interest payments.
Expenditure
Compensation of Employees is projected at GH¢35,841 million (7.1% of GDP) and constitute 26.1 per cent of the Total Expenditure.
Use of Goods and Services is also projected at GH¢9,149 million (1.8% of GDP). This represents 6.7 per cent of the projected Total Expenditure (including arrears clearance).
Interest payments are projected at GH¢37,447 million (7.5% of GDP).
Of this amount, Domestic Interest due will constitute about 77.3 per cent and amount to GH¢28,943 million.
Mr Ofori-Atta said “To reduce the cost of borrowing, the government will continue to explore options of re-profiling domestic debt in 2022.”
Budget Rigidities
He continued that the government will continue to implement the Earmarked Funds Capping and Realignment Act to reduce budget rigidities and create fiscal space to fund growth-enhancing expenditures as has been done since 2017.
Capital Expenditure (CAPEX) is projected at GH¢16,396 million (3.3% of GDP), representing a growth of 28.8 per cent over the projected 2021 outturn.
Of this amount, Domestically Financed CAPEX is estimated at GH¢7,795 million (1.6% of GDP) as shown in Figure 11.
An amount of GH¢8,601 million has been estimated for Foreign Financed CAPEX and this will be funded by a combination of Project Grants and Loans.
Other Expenditure, mainly comprising Energy Sector Levies (ESL) transfers, and starting from 2022 also payments to Independent Power Producers (IPPs) and Financial Sector costs (GAT capitalisation), is estimated at GH¢9,967 million.
BY Samuel Boadi