Finance Minster, Seth Terkper has requested an additional GHS1.8 billion to manage the economy.
In the original 2016 Budget, government asked for GHS50,109,851,734 to fund its expenditure but due to challenges in accruing projected cash from the oil revenue, the power crisis, as well as drop in commodity prices made it impossible to meet the target.
Finance Minister Seth Tekper presenting the 2016 Supplementary Budget to parliament this morning said government will need the extra cash to invest in key sectors of the economy.
The presentation which also highlighted government’s fiscal plans for the remaining six month of 2016 was also heavy on government’s plans to deal with the budget deficit and overruns.
According to him, the declining price of oil, which went as low as 28 dollars per barrel against government’s benchmark of 53.05 dollars per barrel negatively affected revenue projections for the first half of 2016.
In addition, he stated that the frequent shutdown of the FPSO Kwame Nkrumah impacted on gas supply to power plants in the Aboadze enclave forcing government to embark on contingency expenditures to supply crude oil for the plants to supply power.
He added that challenges from the West African Gas Pipeline Company, during the period under review has also resulted in erratic power supply affecting businesses.
While other commodity prices of Ghana’s major export earnings including gold have also seen a dip, all impacting on the country’s projected income.
Revenue shortfalls
According to Mr. Terkper majority of targets set in the 2016 budget were not met.
For example, projected tax revenue of 11 billion cedis fell by 6.4 percent to 10.3 billion cedis, while the cash deficit increased to 2.5 percent as against the 2.2 percent target.
In general, government accrued only 20.92 million cedis in revenue as compared to the 484.79 million cedi project.
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By: Vivian Kai Lokko & Lawrence Segbefia/citibusinessnews.com/Ghana