The government of Nana Addo Dankwa Akuffo-Addo will restore fiscal discipline in the Ghanaian economy and reverse its dwindling fortunes, Ken Ofori-Atta, Minister of Finance, has said.
Presenting the government’s budget to parliament on Thursday 2 March, he said: “The country’s debt stock has reached a level of approximately 73 per cent of GDP as at the end of 2016, which is in excess of the debt sustainability threshold of 70 per cent.
“This has resulted in high debt service costs with interest payments alone taking up nearly 42 per cent of tax revenue. This, together with compensation of employees, is more than the total domestic revenue, leaving no fiscal space for growth-enhancing policy programmes and expenditures.
“Total expenditures at the end of December 2016 stood at 30.3 per cent of GDP against the target of 26.4 per cent of GDP with an outstanding stock of arrears of nearly GHS7 billion. This is at variance with the performance criteria on the non-accumulation of arrears of the 2016 fiscal year under the IMF-supported credit facility programme.
“The large fiscal slippages resulted in the fiscal deficit of 8.7 per cent of GDP on a cash basis and a 10.3 per cent on commitment basis. This is a sharp deflation from the IMF programme fiscal target of 5.3 per cent of GDP. We intend to reverse this trend and restore fiscal discipline.”
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