Ghana’s Finance Minister, Ken Ofori-Atta, has said that the government plans to spend GH¢137, 529 million for 2022 fiscal year.Presenting the budget proposal to the Parliament on Wednesday in Accra, the minister said the amount, which is about 27.4 percent of the Gross Domestic Product (GDP), would be used to clear arrears and fund government’s key flagship programmes for 2022.
Mr Ofori-Atta, who requested the Parliament to approve the budget estimates and economic policy of government, explained that the budget, would revive the economy and put it on the path of growth.
The report by the Ghanaian Times on Thursday quoted Mr. Ofori-Atta as saying that the key drivers of expenditure growth include capital expenditure, funding of key government flagship programmes, including the Ghana CARES ‘Obaatan Pa’ programme, wage bill and interest payment.
He said that compensation of employees was projected at GH¢35, 841 million, equivalent of 7.1 percent of GDP and constitutes 26.1 percent of the total expenditure (including arrears clearance.)
He said that interest payment was projected at GH¢37, 447 million, equivalent to 7.5 percent of GDP.
Giving the breakdown of budget, the minister said that domestic interest due will constitute about 77.3 percent and amount to GH¢28, 943 million, and to reduce the cost of borrowing government will continue to explore options of re-profiling domestic debt in 2022.
He said in 2022, government would continue to earmark funds capping and realignment Act to reduce budget rigidities and create fiscal space to fund growth-enhancing expenditures as had been done since 2017.
According to him, Capital Expenditure (CAPEX) is projected at GH¢16, 396 million equivalent to 3.3 percent of GDP, representing a growth of 28.8 percent over the projected 2021 outturn.
“Of this amount, domestically financed CAPEX and this will be funded by a combination of project grants and loans,” he said.
The Finance Minister said other expenditure mainly comprising Energy Sector levies transfers, and starting from 2022, also payment to Independent Power Producers and Financial Sector costs were estimated at GH¢9, 967 million.
Total revenue and grants for 2022 is projected to rise to GH¢100, 517 million, equivalent to 20 percent of GDP from a projected outturn of GH¢70, 347 million, equivalent of 16 percent of GDP, while domestic revenue is estimated at GH¢99, 547 million, which represented an annual growth of 44 per cent over the project outturn for 2021.
Mr. Ofori-Atta said the corresponding Primary Surplus of GH¢435 million, equivalent to 0.1 percent of GDP was also projected for next year and that
total foreign financing and exception financing such as the use of International Monetary Fund Special Drawing Right allocation would amount to GH¢9, 091 million, equivalent to 1.8 percent of GDP.