The government has revised the 2021 gross domestic product (GDP) growth rate to 5.1%, up from the 5.0% originally projected in the 2021 Budget.
Presenting the Mid-Year Budget Review in Parliament on Thursday (29 July), Ken Ofori-Atta, the Minister for Finance, said, “Over the medium term (2022-2025), real GDP growth is expected to average 5.4%, supported by a ramp-up in the government’s flagship programmes, the implementation of the Ghana CARES/Obaatanpa programme, benefits from the AfCFTA Programme, an enhanced digitalisation drive, an aggressive FDI push, and the pursuance of the Ghana as a regional hub agenda.”
Ofori-Atta added, “Mr Speaker, the originally projected gross international reserves cover of four months of import of goods and services and the end period inflation projection of 8.0%, however, remain unchanged.”
Total revenue and grants
Ofori-Atta said, “Mr Speaker, total revenue and grants have been revised to GHC72,477 million (16.5% of GDP) in 2021, representing a 0.03% increase over the original 2021 Budget target of GHC72,452 million (16.7% of GDP), and 31.5% higher than the 2020 outturn of GHC55.128 million (14.4% of GDP).”
He said the total expenditure (including payments for the clearance of arrears) is projected to remain unchanged from the original Budget projection of GHC113.75 billion (25.9% of GDP), about 13.7% higher than the 2020 outturn of GHC100.026 billion.
However, he said, some expenditure items, have been adjusted to reflect developments in the first half of 2021 while ensuring that the total envelop remains intact.
“Upward adjustment in compensation of employees by GHC1,177 million from the original projection of GHC30,314 million (7.0% of GDP) to GHC31,491 million (7.2% of GDP), reflecting the increase in the public sector base pay by 4.0%.”
“Savings of GH¢3,336 million from the downward adjustment of interest payments to GHC32,528 million (7.4% of GDP), 9.3% below the original target of GHC35,864 million (8.3% of GDP). This is largely on account of the implementation of the domestic liability management strategy which has seen a reduction in the cost of borrowing along the yield curve.”
He added, “Mr Speaker, the outturn for total revenue and grants represents an execution rate of 87.5% compared to the period’s target, and an annual nominal growth of 18.2%.
“Non-oil tax revenue – which comprises non-oil taxes on income and property, taxes on goods and services and international trade taxes –constituted 78% of total revenue and grants and amounted GHC22,099 million (5.1% of GDP) against a target of GHC24,384 million (5.6% of GDP).
“Despite the shortfall from target, the outturn represents an annual increase of 21.9%,” the minister said.
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