The Government of Ghana is seeking an additional GHS1.8billion to supplement the 2016 budget for the second half of the year.
Finance Minister Seth Terkper told parliament on Monday July 25 when he presented the supplementary budget and mid-year review that the amount would help the government make up for its revenue shortfalls.
The November budget projected oil revenues at $53/barrel but oil prices are still hovering under the $50 mark, which means the expected oil revenue has not been met. In addition to the sharp fall in oil prices, technical faults that bedevilled FPSO Kwame Nkrumah in the Jubilee oil fields also frustrated oil production and gas supply, which in turn had a negative impact on expenditure. Also, the third tranche of the $918million IMF bailout money is yet to be released. Further, the delay in launching another $1bn Eurobond has also created a revenue shortfall which needs plugging.
Mr Terkper said most of the targets set by the government for 2016 were not met, thus the need for GHS1.8billion more to shore up things. According to him, tax revenue of GHS11billion fell by 6.4 per cent to GHS10.3billion, while the cash deficit increased to 2.5 per cent as against the 2.2 per cent target. According to him, Gross Domestic Product (GDP) rate grew by 3.8 in 2015, while the economy grew at 4.9 by the first quarter of 2016, compared to 4.5 per cent in 2015.
Mr Terkper, who doubles as the acting Minister of Power, told parliament that the Mahama-led administration had been implementing broad policy initiatives to address imbalances in the economy and consolidate “our middle-income status”, as the country progresses towards a “brighter” status.
According to Mr Terkper, GDP-to-public-debt ratio had been reduced from 72% to 63% as of the end of 2015, with Ghana’s local debt stock now standing at 26% and foreign debt standing at 37%. He said the GDP rate increased by 3.8 per cent in 2015, while the economy grew at 4.9 per cent by the first-quarter of 2016, compared to 4.5% in 2015.
Mr Terkper also said government was persisting with its smart borrowing policy. He attributed the government’s economic achievements to home-grown solutions implemented by the government in the past few years.
“We have made significant progress in implementing these transformational initiatives,” Mr Terkper told the house. He also said the currency had achieved stability, thus, bringing back confidence in the economy and announced that the government asked for GHS3billion to undertake certain development programmes