Five of the six expenditure items of the government fell short of its target in the first quarter of 2023, the Bank of Ghana’s May 2023 Monetary Policy Report has revealed.

They were Total Interest Payments, Capital Expenditures, Grants to Other Government Units, Use of Goods and Services and Other Expenditures.

Compensation of Employees was the only expenditure item that went up.

Overall, total expenditures including arrears clearance and discrepancy for the first quarter of 2023, summed up to ¢32.721 billion (4.1% of Gross Domestic Product).

This was below the target of ¢52.11 billion (6.5% of GDP) by 37.2% and represents 4.4% year-on-year decline.

Compensation of Employees

Compensation of Employees (including wages and salaries, pensions & gratuities, and other wage-related expenditure) was ¢12.108 billion, higher than the target of ¢11.381 billion.

This outturn exceeded the target by 6.4% and recorded 40.6% year-on-year growth. In terms of fiscal flexibility, compensation of employees constituted 47.1 percent of domestic revenue mobilized during the period under review.

Total interest payments

Total Interest Payments for the first quarter were estimated at ¢6.093 billion. This was below the envisioned target of ¢13.989 billion for the review period.

The outturn was down by 44.2% compared with ¢10.926 billion recorded in the corresponding period of 2022.

The lower interest payment was mainly on account of the partial freeze on debt service due to the debt restructuring programme.

Capital Expenditure

Capital Expenditure for the period under review was ¢3.196 billion (0.4% of GDP), lower than the programmed target of ¢8.713 billion (1.1% of GDP) by 63.3%. This outturn represented year-on-year growth of 3.9%.