Home / General News / Ghana overruns 2012 budget fiscal deficit target almost 100%

Ghana overruns 2012 budget fiscal deficit target almost 100%

Share this with more people!

Fuel_station…as a result of fuel subsidies, high salaries

After setting a 6.7% budget deficit target for 2012, Ghana overshoots the target almost 100% as the country spent more than the revenue it had.

The budget deficit was as a result of increased salaries, lower income taxes, utility and fuel subsidies, the central bank reported February 13, 2013.

Ghana’s total revenue and grants in 2012 amounted to GH¢16.1 billion (22.3% of GDP) against a budget estimate of GH¢16.9 billion, the Bank of Ghana (BoG) indicated.

The country’s expenditures including arrears clearance and commitments totalled GH¢24.8 billion (34.5% of GDP), 14.7% higher than the budget target.

“These developments in the fiscal operations resulted in a deficit of GH¢8.7 billion which is 12.1% of GDP against a target of GH¢4.7 billion (6.7% of GDP), Dr Kofi Wampah, acting BoG governor, told reporters when presenting summaries of the 54th Monetary Policy Committee (MPC) meeting.

Dr Wampah mentioned shortfall in corporate income taxes – GH¢708.2 million (1% of GDP), excess payments on single spine salary – GH¢1.9 billion (2.7% of GDP), higher interest cost – GH¢245 million (0.3% of GDP) and higher fuel and utility subsidies – GH¢339 million (0.5% of GDP) as activities that contributed to the higher budget fiscal deficit.

According to the BoG, the deficit was financed mainly from domestic sources.

Net domestic financing accounted for GH¢7.1 billion of which the central bank says its financing was 31% while foreign financing was GH¢1.6 billion.

By Ekow Quandzie

Share this with more people!

Check Also

Organized labour calls for new Commission to restructure public sector salary

Dr Yaw Baah, Secretary General, Trade Union Congress, Ghana, has called on government to establish …