Finance Minister, Ken Ofori-Atta is in parliament seeking approval to spend ¢27.4 billion for the first quarter of 2021. The amount is to help government meet its expenditure needs for the first three months of next year.
During election years, the Finance Minister presents a budget for the first quarter of the following year until after an elected President is sworn into office.
Government has scaled down the projected 2021 Fiscal Deficit from 9.6% of Gross Domestic Product (GDP) as reported in the Mid-Year Review to 8.3%of GDP.
This reflects improved revenues from the anticipated pick-up of economic activities and a more rationalized public expenditure programme.
According to Finance Minister, Ken Ofori-Atta, it expects the country to return to the fiscal responsibility threshold of 5.0% of GDP fiscal deficit and a positive primary balance earlier than the 2024 fiscal year previously announced.
The government exceeded their respective targets for both revenue and expenditure in the first nine months of the year resulting in the fiscal deficit of 9.0% of Gross Domestic Product, Mr. Ofori-Atta emphasised. This is against a programmed deficit of 8.9% of GDP.
Total revenues and grants for the period which totalled GH$36.7billion exceeded the target of GHS35.7 billion by GHS972.7million or 2.7%.
Total expenditures, including arrears clearance, on the other hand, amounted to GHS71.3 billion against a target of GHS70.0 billion, showing a deviation of GHS1.3 billion or 1.8% from target.
The overall fiscal deficit resulting from the revenues and expenditure performance for the period through September 2020 was GHs34.6 billion or 9.0% of GDP against a target GHS34.3 billion or 8.9% of GDP.
Fitch, World Bank, IMF forecast higher fiscal deficit
International ratings agency, Fitch is forecasting a fiscal deficit to Gross Domestic Product of 10.5% for Ghana in 2020.
This will be more than twice the 2019 commitment basis deficit of 4.7 percent.
The World Bank and the IMF are also forecasting fiscal deficit to GDP of about 12% and 16.4% respectively.
Their arguments are that revenue mobilization will be slow during the period to balance the expenditure.