The government says it plans to spend some GH¢226.7 billion in the 2024 financial year but aims to generate GH¢176.4 billion in the same year, the Finance Minister has disclosed.
Presenting the 2024 Budget Statement and Economic Policy, Mr. Ken Ofori-Atta pointed out that the government’s anticipated total expenditure stands at GH¢226.7 billion, representing 21.6 percent of the Gross Domestic Product (GDP).
In his further explanation of the complete fiscal policy, he pointed out that overall spending has been significantly cut, saving 6.1 percentage points of GDP in comparison to the 2022 dip.
He clarified that this decrease is the consequence of several fiscal consolidation initiatives, including adjustments to primary expenditure of 4.0 percentage points and revenue of 4.9 percentage points.
Additionally, the Finance Minister emphasised the anticipated interest rate savings from the ongoing external debt operation, highlighting its beneficial effects on the sustainability of state finance.
“Mr Speaker, Total Revenue and Grants are projected at GH¢176.4 billion (16.8 percent of GDP) and are underpinned by permanent revenue measures, largely tax revenue measures amounting to 0.9 percent of GDP.”
“Total expenditure (commitment) is projected at GH¢226.7 billion (21.6 percent of GDP). This projection reflects a reduction of 6.1 percentage points of GDP in total expenditures (commitment basis) relative to the outturn in 2022.”
“This large decrease comes from the combination of fiscal consolidation efforts of 4.9 percentage points of GDP, reflecting an adjustment in revenue by 1.0 percentage point and primary expenditure by 4.0 percentage point of GDP.”
“The potential interest rate savings from the ongoing external debt operation will further bolster public finance sustainability. Mr. Speaker, based on the estimates for Total Revenue & Grants and Total Expenditure (including arrears clearance), the overall budget balance to be financed is a fiscal deficit of GH¢ 61.9 billion, equivalent to 5.9 percent of GDP. The corresponding primary balance is a deficit of GH¢5.9 billion, equivalent to 0.6 percent of GDP”.
In a communiqué from Information Minister Kojo Oppong-Nkrumah last month, the government served notice of its intention not to overspend in 2024, as is characteristic of most election years.
The government is presently awaiting the second tranche of the IMF bailout of $600 million, amidst continued talks with external creditors.
