Government has christened the 2021 Budget as “Completion, Consolidation and Continuation” budget.

This theme it says is underpinned by the fact that over the years every new budget invariably contains a host of new projects to be initiated at the expense of ongoing projects.

“Not only does this puts pressure on our finances but has historically resulted in arrears, with many contractors not being paid on time for work done and thereby escalating the overall cost of these projects”, Majority Leader, Osei Kyei Mensah-Bonsu disclosed whilst presenting the 2021 Budget and Economic Policy to Parliament today.

However, the fiscal situation the economy finds itself calls for a fiscal consolidation or a tight, low-spending budget which to a larger extent depict this year’s budget.

And Mr. Mensah-Bonsu said government has therefore, decided to chart a new direction from 2021.

He said “a major concern of all Ghanaians across the political divide, is the usually wasteful spectre of uncompleted public projects scattered across the country. This must stop. Governments owe the people a duty to use limited public funds responsibly”.

Furthermore, “our goal is to bring to an end the culture of unfinished projects. The main focus of government for this year is the fulfilment of existing commitment and the completion of existing projects”, he pointed out.

The Delivery Tracker, which the Government launched last year to track the progress of infrastructure projects, showed over 8,700 ongoing projects across all sectors at the end of 2020.

“That is why the President has tasked his Ministers and heads of all other relevant institutions to focus the infrastructural energies of government mainly on continuing and, if possible, completing existing projects in 2021. The era of abandoning viable projects started with public funds must end and that time, we believe, is now”, Mr. Kyei Mensah-Bonsu emphasized.

2021 macroeconomic targets

Government forecast an overall real Gross Domestic Product growth to average 5.0% in 2021, whilst non-oil real GDP will grow at an average of 6.7%.

Inflation is projected to be within the target band of 8±2 percent, while end-year inflation will be in the region of 8%.

Overall, the government predicted fiscal balance and primary balance will return to the Fiscal Responsibility Act threshold of fiscal deficit of 5% GDP and a positive primary balance by 2024. It however forecast a fiscal deficit of 9.5% of GDP in 2021 and a primary balance of 1.2% of GDP.

On the other hand, Gross International Reserves will cover at least 4.0 months of imports.

Resource Mobilization for 2021

Government said total revenue and grants for 2021 is projected to rise to GH¢72.4 billion, equivalent to 16.7% of GDP, up from an outturn of GH¢55.1 billion, equivalent to 14.3% of GDP recorded in 2020. Domestic revenue is however estimated at GH¢70.9 billion in 2021 and represents an annual growth of 31.7% over the recorded outturn for 2020.

Of the total domestic revenue, non-oil tax revenue will constitute about 74% and amount to GH¢53.6 billion, equivalent to 12.4 percent of GDP. This reflected the impact of expected improvements in tax compliance and reforms in revenue administration

Resource allocation for 2021

Government forecast a total expenditure (including clearance of arrears) at GH¢113.7 billion equivalent to 26.2 percent of GDP for 2021.

This represents a growth of 13.7 percent above the outturn of GH¢100.052 billion recorded in 2020.

Wages and Salaries are projected to amount to GH¢25.799 billion and constitute 22.7% of the total expenditure (including arrears clearance) for 2021.

As a percentage of GDP, the wage bill is projected to be 5.9% in 2021 compared to the 6.5% recorded in 2020.

Interest Payments are however projected at GH¢35.8 billion, equivalent to 8.3% of GDP in 2021.Of this amount, domestic interest payments will constitute about 79.1% and amount to GH¢28.3 billion.

Transfers to Statutory Funds as well as all other earmarked funds are estimated at GH¢18.08 billion (4.2% of GDP), representing 52.2% growth over the recorded outturn for 2020.

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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.