Ghana: 2022 Budget Statement, Economic Policy – Government to spend GH 137million, $ 529million next year
Finance Minister Ken Ofori-Atta yesterday asked Parliament for approval of GH ¢ 137,529 million (equivalent to 27.4%) of gross domestic product (GDP) as expenditure for fiscal year 2022.
He said the proceeds would be used to clear arrears and fund key government flagship programs for next year.
Mr Ofori-Atta requested it when he presented the 2020 budget forecast and the government’s economic policy to Parliament in Accra.
This year’s budget titled “Budget Agyenkwa” is themed “Building a Sustainable Entrepreneurial Nation: Fiscal Consolidation and Job Creation”.
The budget, which included measures to revive the economy and put it back on the path to growth, is the government’s second in power since taking office in 2020.
Mr. Ofori-Atta said the main drivers of spending growth include capital spending, funding of major government flagship programs including Ghana CARES “Obaatan Pa” program, payroll and interest payments.
He said employee compensation was estimated at GH ¢ 35,841 million, equivalent to 7.1% of GDP and constitutes 26.1% of total expenditure (including arrears clearance).
Mr. Ofori-Atta said the interest payment was projected at GH ¢ 37,447 million, equivalent to 7.5% of GDP.
“Of this amount, the national interest due will represent about 77.3% and will amount to GH ¢ 28,943 million. To reduce the cost of borrowing, the government will continue to explore options for reprofiling domestic debt by 2022, “he said.
He said that in 2022, the government would continue to allocate the cap and realignment law to reducing fiscal rigidities and creating fiscal space to finance growth-promoting spending, as had been previously done. made since 2017.
“Mr. President, capital expenditure (CAPEX) is projected at GH ¢ 16,396 million, equivalent to 3.3% of GDP, which represents a growth of 28.8% compared to execution planned for 2021. Funded by a combination of grants and project loans, ”he said.
The finance minister said that other spending mainly comprising the transfer of levies in the energy sector and, from 2022, the payment to independent power producers and the costs of the financial sector were estimated at 9,967 million. by GH ¢.
Total revenues and grants for 2022 are expected to reach GH ¢ 100,517 million, equivalent to 20% of GDP out of a projected result of GH ¢ 70,347 million, or equivalent to 16% of GDP.
He said national revenues were estimated at GH ¢ 99,547 million, representing an annual growth of 44% compared to the project’s results for 2021.
Mr. Ofori-Atta said the corresponding primary surplus of GH ¢ 435 million, equivalent to 0.1 percent of GDP, was also forecast for the year.
He said the total foreign funding and contingency funding such as the use of the International Monetary Fund’s Special Drawing Rights allocation would amount to GH ¢ 9,091 million, the equivalent of GH ¢ 1, 8 percent of GDP.