The International Monetary Fund has contradicted government’s fiscal deficit of Gross Domestic Product (GDP) claim of 11.7% achieved in 2020, as its data shows that government financing gap was actually 16% of GDP in 2020.
This made it one of the highest among low-income developing countries. Zambia followed closely with a budget deficit to GDP ratio of 13.9%.
The government in the 2021 Budget and Economic Policy said its fiscal deficit (gap between revenue and expenditure) to GDP was estimated at 11.7% of GDP.
But the Fund’s April 2021 Fiscal Monitor stated otherwise.
It is also projecting a financing gap of 12.6% and 10.4% in 2021 and 2022 respectively.
In 2023, 2024 and 2025, the Bretton Wood institution is forecasting a fiscal deficit of GDP of 9.3%, 9.1% and 8.9% respectively.
All things being equal, the gap between revenue and expenditure will fall to 6.8% in the year 2026.
Overall Budget Balance and Financing
The government said in the 2021 Budget and Economic Policy that its fiscal operations resulted in a cash basis deficit of GH¢44.898 billion, equivalent to 11.7% of GDP, compared to the revised target of GH¢44.074%, equivalent to 11.4% of GDP.
Also, the corresponding Primary Balance recorded a deficit of GH¢20.299 billion, equivalent to 5.3 percent of GDP, 14.0 percentage points higher than the programmed deficit of GH¢17.806 billion, equivalent to 4.6 percent of GDP.
Revenue performance
The government said in the 20201 Budget and Economic Policy that Total Revenue and Grants for the fiscal year 2020 amounted to GH¢55.128 billion, compared with the target of GH¢53.6 billion.
It pointed out that the 2020 outturn exceeded the 2019 performance by 3.3% and the target for the year by 2.7%.
Non-oil tax revenue, comprising taxes on non-oil Income and Property, Domestic Goods and Services, and International Trade, amounted to GH¢42.4 billion (11.1 percent of GDP). The recorded outturn exceeded the revised Budget target of GH¢40.7 billion (10.6% of GDP) by 4.1%.
Expenditure Performance
The government said on the expenditure front, the execution of expenditures for the period exceeded the programme target slightly by 2.3%.
“The higher than programmed target reflects the unanticipated expenses incurred to mitigate the negative impact of COVID-19. Consequently, Total Expenditures (including arrears clearance) for the period amounted to GH¢100.026 billion compared to a programme target of GH¢97.740 billion and represents a year-on-year growth of 42.3%”, it said.
Latest Stories
-
#JustTurned18: I now have an opportunity to use my thumb to bring someone into power – Excited prospective voters
12 mins -
OSP acted as a whistleblower transferring Cecilia Dapaah’s case to EOCO – Sammy Darko
16 mins -
IMF calls for tariff adjustment for energy sector cost recovery
38 mins -
Samson’s Take: Journalists, block the pretentious idiots
2 hours -
Real Madrid crowned LaLiga champions after Barcelona’s defeat at Girona
2 hours -
Daniel Otting Awuah elected SRC President of Ghana School of Law
3 hours -
Lawrence Ati-Zigi signs St. Gallen contract extension
3 hours -
We should be careful not to destroy our institutions without just cause – Serebour Quaicoe
4 hours -
Cecilia Dapaah’s case: EOCO hasn’t requested FBI report – Office of the Special Prosecutor
6 hours -
Andre Ayew scores 5th league goal as Le Havre beat Strasbourg
6 hours -
Ejisu by-election: NPP didn’t sanction money distribution to voters – Richard Ahiagbah
6 hours -
Ghana Health Service opens vacancies for 204 doctors, 25 dentists
6 hours -
Domestic tourism on the rebound with 1.4m visits to attraction sites in 2023 – GTA
7 hours -
Government working hard to complete Tema General Hospital project – Dr Okoe Boye
7 hours -
Ipswich Town seal Premier League promotion after 22 years absence
7 hours