Finance Minister, Ken Ofori-Atta, yesterday requested Parliament for an approval of GH¢137, 529 million (equivalent of 27.4 per cent) of Gross Domestic Product (GDP) as an expenditure for the 2022 fiscal year.
He said the amount would be used to clear arrears and fund government’s key flagship programmes for the next year.
Mr Ofori-Atta made the request when he presented the 2020 budget estimates and economic policy of government to Parliament in Accra.
This year’s budget dubbed “Agyenkwa Budget” is on the theme “Building a sustainable entrepreneurial nation: fiscal consolidation and job creation.”
The budget, which among others, outlined measures to revive the economy and put it on the path of growth, is the second by the ruling government since it assumed power in 2020.
Mr Ofori-Atta said 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 compensation of employees was projected at GH¢35, 841 million, equivalent of 7.1 per cent of GDP and constitutes 26.1 per cent of the total expenditure (including arrears clearance.)
Mr Ofori-Atta said interest payment was projected at GH¢37, 447 million, equivalent to 7.5 per cent of GDP.
“Of this amount, domestic interest due will constitute about 77.3 per cent and amount to GH¢28, 943 million. To reduce the cost of borrowing government will continue to explore options of re-profiling domestic debt in 2022,” he said.
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.
“Mr Speaker, Capital Expenditure (CAPEX) is projected at GH¢16, 396 million equivalent to 3.3 per cent of GDP, representing a growth of 28.8 per cent 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 was projected to rise to GH¢100, 517 million, equivalent to 20 per cent of GDP from a projected outturn of GH¢70, 347 million, equivalent of 16 per cent of GDP.
He said domestic revenue was 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 per cent of GDP was also projected for the year.
He said 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 per cent of GDP.
BY KINGSLEY ASARE & JESSEL LARTEY THERSON-COFIE