The Bank of Ghana (BoG) has hinted to Citi Business News the country’s revenue is likely to shoot up by the end of this year. The country since the beginning of this year has missed all its revenue targets.
The shortfalls in revenue have been attributed to a number of things including shortfalls in domestic revenue collection and low disbursement of grants.
According to preliminary fiscal data from the bank of Ghana for the first seven months of the year both revenue and expenditure remained below their respective targets.
However, the shortfall in revenue was much higher than the reduction in expenditure. Total revenue and grants was GH˘10.4 billion, lower than the target of GH˘12.5 billion.
But governor of the BoG Dr Henry Wampah says revenue collection is likely to soar by the end of the year as economic activities increases.
“From our discussions with GRA they have told us that they have seen some increase in revenue; The pickup started in August and some of the measures to boost revenue will also start yielding results.
But whether it will be enough to achieve the targets is another issue but definitely given the pickup in economic activities we will see some increase in revenue collection. So we anticipate seeing that increase in revenue collection going forward.’’ He said.
Meanwhile domestic revenue for the period totaled GH˘9.8 billion, below the target of GH˘11.6 billion.
Total tax revenue amounted to GH˘7.7 billion, lower than the target of GH˘9.1 billion. Grant disbursements were GH˘542 million, falling short of its target by 41.7 percent. Non-tax revenues amounting to GH˘2.1 billion for the period also missed the target by 12.4 per cent.
While total expenditure including clearance of arrears and outstanding commitments amounted to GH˘16.0 billion, lower than the budget target of GH˘17.5 billion.
However, compensation of employees exceeded its target of GH˘5.1 billion and amounted to GH˘5.5 billion. Similarly, interest payments totaling GH˘2.6 billion, breached its target of GH˘1.8 billion.
The above developments resulted in a fiscal deficit (cash basis) equivalent to 6.3 percent of GDP against a target of 5.6 percent.
The deficit was financed mainly from domestic sources, resulting in a Net Domestic Financing (NDF) of GH˘4.4 billion, higher than the budget target of GH˘3.6 billion.
Foreign financing of the budget amounted to GH˘1.3 billion, marginally lower than the GH˘1.5 billion target. Financing from Bank of Ghana amounted to GH˘1.0 billion, equivalent to 4.9 percent of projected revenue.
The stock of public debt increased to GH˘43.9 billion (49.5% of GDP) at end of August 2013, from GH˘35.1 billion in December 2012. Of this, the domestic component amounted to GH˘24 billion compared to GH˘18.5 billion in December 2012.
External debt stood at US$10.2 billion, up from US$8.8 billion in December 2012. The increase in the external debt was mainly due to the sovereign bond issue.
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