Government has recorded major decreases in its expenditure line items for the first quarter of 2023.
Out of the six expenditure line items, only the compensation of employees increased.
The Bank of Ghana in its May 2023 Monetary Policy Report indicated the expenditure performance was partly attributed to a reduced debt service due to the debt restructuring programme.
According to the Bank of Ghana, budget execution for the first quarter of 2023 showed some revenue shortfalls while expenditures were broadly within target.
Overall total expenditures including arrears clearance and discrepancy for the first quarter of 2023, summed up in excess of GHS 32 billion.
This was below the target of ¢52 billion representing 4.1 percent of GDP.
Compensation of Employees including wages and salaries, pensions & gratuities, and other wage-related expenditure was the only item that went up to GHS 12 billion, higher than the target of ¢11 billion.
It constituted 47.1 percent of domestic revenue mobilized during the period under review.
All other expenditure items, including total Interest Payments for the first quarter were estimated at ¢6 billion. This was below the envisioned target of ¢13 billion for the review period.
The lower interest payment was mainly on account of the partial freeze on debt service due to the debt restructuring programme.
For capital expenditure it was ¢3 billion lower than the programmed target of ¢8 billion
Use of goods and services totalled in excess of GH¢1 million, lower than the expected target of
Grants to other government units comprising National Health Fund, GETFund, Road Fund, Energy Fund, District Assemblies Common Fund (DACF), Retention of IGFs, transfer to GNPC, Ghana Infrastructure Fund and other earmarked funds all summed up to GH¢5.7 million, lower than the envisioned target of GH¢7.2 million.
Other expenditure made up of ESLA Transfers, Covid-19 related expenditure, and other critical spending, for the first quarter of 2023, was GH¢2.1 million, which was below the target of GH¢4.6 million.
The Central Bank adds that, while this is positive for the domestic economy, it remains conditional on the commitment to implement the policies and structural reforms under the IMF programme.
These will include structural reforms on tax policy, revenue administration, and public financial management to boost revenues and reposition fiscal policy implementation onto a consolidated and sustainable path.