Ghana’s fiscal deficit is expected to narrow during the second half of the year as the country expects donor inflows to support the 2013 budget.
Economy Times has learnt that, grant disbursements fell short of target by 38.3 percent, reflecting non-disbursement from the Multi-Donor Budget Support (MDBS) partners.
The Ministry of Finance and Economic Planning is yet to meet the conditions of MDBS partners to enable the country receive budgetary support from the partners, Economy Times has learnt.
The Provisional estimates on broad fiscal data show that the government recorded an overall budget deficit of GHC 3.4 billion for the first four months of 2013, which is equivalent to 3.8% of Gross Domestic Product (GDP) against a target of GH˘2.7 billion representing 3% of GDP.
This outturn was on the back of a significant shortfall in revenues with expenditures marginally below target, according to the Governor of the Central Bank Dr. Henry Kofi Wampah.
The deficit was financed mainly from domestic sources, resulting in a Net Domestic Financing (NDF) of GH˘2.7 billion, higher than the budget target of GH˘2.2 billion. Foreign financing of the budget amounted to GH˘687.2 million, also higher than the GH˘482.1 million target.
Total revenue and grants was GH˘6.3 billion, against a target of GH˘7.1 billion. Of this outturn, domestic revenue amounted to GH˘5.9 billion, below the target of GH˘6.4 billion on account of lower tax revenues. Total tax revenue amounted to GH˘4.2 billion, below the target of GH˘4.9 billion. The low tax revenue collection over the period was the result of lower company profits and lower imports due to the general slowdown in economic activity.
Non-tax revenues, on the other hand, turned in higher than budgeted at GH˘1.6 billion, compared to the target of GH˘1.5 billion.
Total expenditures, including payments for the clearance of arrears and outstanding commitments amounted to GH˘9.7 billion, lower than the budget target of GH˘9.8 billion. The wage bill amounted to GH˘3 billion, against a target of GH˘2.8 billion. Similarly, interest payments amounted to GH˘1.6 billion, against a target of GH˘1.1 billion.
The fiscal outturn for the first quarter also pointed to significant revenue shortfalls although expenditures remained broadly within targets.
The government has put in place measures to address the revenue shortfalls and rationalise expenditures including a freeze on new projects to help with the fiscal consolidation efforts.
Source: Economy Times
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