The Minister of Finance and Economic Planning, Seth Terpker is asking parliament to approve a GH¢3,196,855,671 Supplementary Budget Estimate in conformity with Article 179(8) of the Constitution for the rest of the year.
This follows his presentation to Parliament of a mid-year review of the budget statement and economic policy of government for consideration and adoption.
Government has reviewed its overall real GDP growth (including oil) target from 8% to 7.1%.
The non-oil real GDP growth has been revised from 7.4 percent to 6.6 percent.
As part of the review of a number of macro-economic targets, inflation rate target for the year has been reviewed to 13.0±2 percent from 9.5 ±2 percent.
The overall budget deficit target has been revised from 8.5 percent of GDP to 8.8 percent and Gross International Reserves of not less than 3 months of import cover of goods and services.
According to Mr. Terpker ,” developments in both the global and domestic economic environment have necessitated the revision of the macroeconomic framework and assumptions underlying the 2014 Budget that was presented to this august House in November, 2013. The current energy challenge, rising inflation and interest rates, as well as exchange rate depreciation posed a strong downside risk to the achievement of the growth target for the year”.
The 2014 revenue and expenditure estimates have also been revised to reflect the revisions made to the macroeconomic framework.
Total revenue and grants for the 2014 fiscal year have been revised upwards from GH¢26,056.5 million to GH¢26,230.3 million, equivalent to 22.9 percent of GDP.
The revised revenue and grants for the year represents an increase of 34.7 percent over the outturn for 2013.
“Total non-oil tax revenue have been revised downwards by GH¢948.0 million to GH¢18,712.3 million, equivalent to 16.3 percent of GDP.
The revised non-oil tax revenue for the year represents an increase of 38.1percent over the outturn for 2013” , Mr.Terpker stated.
Due to the exchange rate depreciation, oil revenue have been revised upwards by GH¢707.1 million to GH¢2,416.5 million and grants have been revised upwards from GH¢1,130.7 million to GH¢1,390.8 million.
The estimate for total expenditure and arrears clearance have been revised upwards by GH¢1,331.1 million from GH¢35,027.3 million to GH¢36,358.3 million (31.7 percent of GDP) mainly on account of higher wages and salaries, interest payments, foreign-financed capital expenditures and subsidies.
Wages and Salaries have been revised upwards from GH¢8,967.8 million to GH¢9,218.9 million as a result of the COLA that was approved for public sector employees.
On account of higher interest rates and the depreciation of the cedi, interest payments have been revised upwards from GH¢6,178.6 million to GH¢7,884.7 million.
Due to the exchange rate depreciation, foreign-financed capital expenditure has been revised upwards from GH¢4,525.8 million to GH¢4,748.7 million.
“Mr. Speaker, as a result of the slower-than-expected implementation of utility and petroleum price adjustments, the provision made for subsidies in the 2014 budget have been revised upwards from GH¢50.0 million to GH¢618.8 million” , he affirmed.
Based on the revisions made to the estimates for VAT revenue and total tax revenue in general, transfers to the National Health Insurance Fund, the Ghana Education Trust Fund and the District Assemblies Common Fund are estimated to be lower than earlier projected by GH¢21.8 million, GH¢27.4 million and GH¢54.0 million, respectively.
By: Rabiu Alhassan/citifmonline.com/Ghana