By Franklin ASARE-DONKOH
Government of Ghana says it has planned to undertake a downward review of the oil-related revenue as well as the corresponding expenditures to align with the underperformance of some of the country’s revenue handles.
The Minister of Finance, Mr. Ken Ofori-Atta announced this on Monday, July 31, 2023 on the floor of Parliament during the presentation of the 2023 Mid-Year Budget.
According to him, the downward review of oil-related revenue specifically, will impact the Annual Budget Funding Amount (ABFA).
“Mr. Speaker, in view of the reasons outlined above, as well as the lower domestic interest payment and amortization, following the completion of a part of the DDEP, and the reduction in the foreign financed CAPEX, the Appropriation has been revised from GHS227.7 billion as presented and approved in November 2022 to GHS206.0 billion.
This is in line with Regulations 24 sub-regulation (3) of Public Financial Management Act Regulations 2019 (L.I. 2378).” He stated.
The Finance Minister continued, saying, “Mr. Speaker, we will, therefore, not require a Supplementary Budget.
Mr. Speaker, Government is, however, committed to pursuing a robust growth strategy within the limited fiscal space and our fiscal consolidation programme. This will be done by attracting domestic and foreign private sector investments and expanding production, which will be encouraged and stimulated by Government policies and agencies.”
Government’s Mutual Prosperity Dialogue with the private sector, will seek to facilitate the ease of doing business in order to crowd-in private domestic and foreign investments. He noted.
The Finance Minister proceeded to further update the House on the macro-fiscal performance of the economy since December, 2022.
“Mr. Speaker, as we usually do, the 2023 Budget was presented in November 2022 using end-September 2022 data. We now have end-December 2022 data, which indicate that:
i. Overall Real GDP growth was 3.1 percent compared to the revised target of 3.7 percent;
ii. Non-Oil Real GDP growth was 3.8 percent compared to the revised target of 4.3 percent;
iii. End-December inflation rate was 54.1 percent compared to the projected 28.5 percent;
iv. Total Revenue and Grants for the period amounted to GH¢96.7 billion (15.8 % of GDP) compared with the revised target of GH¢96.84 billion (16.4 percent of GDP).
v. Total Expenditure on commitment basis amounted to GH¢165.1 billion (27.0% of GDP) against the revised target of GH¢133.8 billion (22.6% of GDP);
vi. Overall Budget deficit on commitment basis was 11.8 percent of GDP against the revised target of a deficit of 6.3 percent of GDP;
vii. Primary Balance on commitment basis was a deficit of 4.3 percent of GDP against a revised target of a deficit of 0.7 percent of GDP
viii. On cash basis, the Overall Budget deficit was 10.7 percent of GDP against the revised target of a deficit of 6.6 percent of GDP;
ix. The corresponding Primary Balance on cash basis was a deficit of 3.2 percent of GDP against a revised target of a surplus of 0.4 percent of GDP; and
x. Gross International Reserves was equivalent to 2.7 months of import cover.
Mr. Speaker, with the approval of Parliament, Government set out to achieve the following key macroeconomic targets for 2023:
i. Overall Real GDP growth of 2.8 percent;
ii. Non-Oil Real GDP growth of 3.0 percent;
iii. End-December inflation rate of 18.9 percent;
iv. Overall budget deficit of 5.9 percent of GDP (on commitment) and 7.7 percent on cash basis;
v. Primary Balance (Commitment basis) of a surplus of 0.7 percent of GDP and deficit of 1.1 percent of GDP on cash basis; and
vi. Gross International Reserves to cover not less than 3.3 months of imports.
have indicated, we have made significant progress on restoring macroeconomic.”
