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Ghana's external debt in decline
Accra, Nov. 15, Ghanadot/GNA - Ghana's external debt has
declined from 120.5 per cent of GDP in 2001 (US$6,325.6
million) to about 17.6 per cent (US$2,637 million) of GDP at
the end of September 2007, Finance Minister Kwadwo
Baah-Wiredu told Parliament on Thursday.
Presenting the 2008 budget to Parliament, Baah-Wiredu
attributed the fall to the cancellation granted by external
partners.
According to him, the total public external and domestic
debt was expected to be at the equivalent of 48.5 per cent
of GDP at the end of December 2007.
"We wish to emphasise that all the macroeconomic gains have
been achieved in the face of rising crude oil prices and the
energy crisis.
However, he said, in spite of the relatively strong
macroeconomic stability achieved over the years, the outturn
of the 2006 budget indicated that the fiscal situation came
under severe stress.
Mr Baah-Wiredu said the overall fiscal outturn in 2006
resulted in an overall budget deficit equivalent to 7.8 per
cent of GDP, against a budget target of 4.5 per cent of GDP.
Domestic financing of the budget was a net borrowing of 4.1
per cent of GDP, against a budget target of 0.2 per cent of
GDP.
The domestic primary balance for the year was equivalent to
4.9 per cent of GDP, against a budget estimate of a deficit
equivalent to 1.4 per cent of
GDP.
Mr Baah-Wiredu said total receipts, including domestic
revenue, donor grants, foreign loans and HIPC relief for
2006, amounted to GH¢4,331.7 million, equivalent to 37.7 per
cent of GDP. This was about 0.3 per cent lower than the
budget estimate for 2006.
Domestic revenue made up of tax and non-tax revenue amounted
to GH¢2,556.9 million, against a budget estimate of GH¢2,643.8
million. This indicates an increase of 10.4 per cent over
the outturn for 2005.
He said total tax revenue for the 2006 fiscal year was GH¢2,326.3
million (20.2 per cent of GDP), against a budget estimate of
GH¢2,421.4 million, equivalent to 21.6 per cent of GDP.
The Minister said the underperformance in tax revenue was
mainly due to lower outturn of company taxes, import VAT and
import duties.
Non-Tax Revenue contributed an amount of GH¢92.3 million,
29.8 per cent higher than the Budget target of GH¢71.1
million.
Total grant disbursements amounted to GH¢634.9 million, 17.5
per cent below the Budget estimate of GH¢769.7 million.
Multilateral HIPC Assistance was 37.8 per cent below the
budget target, while Programme grants also fell short of
target by 4.0 per cent. The outturn for Project grants, was
GH¢228.5 million against a budget target of GH¢300.0
million.
Mr Baah-Wiredu said total loans received for 2006 was GH¢460.1
million, against a budget estimate of GH¢670.0 million. Of
this amount project loans amounted to GH¢299.4 million,
while the outturn for programme loans was GH¢160.7 million.
Mr Baah-Wiredu said the provisional actual outturn for total
payments in
2006 fiscal year, made up of statutory and discretionary
payments
was GH¢4,331.7 million against a budget estimate of GH¢4,346.8
million.
Total statutory payments, including interest payments,
amortization, and transfers to households and dedicated
funds amounted to GH¢1,248.7 million, representing about
89.2 per cent of the budget estimate for the year.
The outturn reflects an increase of 12.2 per cent over the
outturn recorded in 2005.
Also, external Debt Service amounted to GH¢325.4 million,
against a budget estimate of GH¢453.7 million. The principal
component of the external debt due was GH¢235.1 million,
against a targeted amount of GH¢347.3 million, while
payments on external interest amounted to GH¢90.3 million,
compared to a budget target of GH¢ 106.4 million, the
Minister said.
Domestic interest payments including interest paid on TOR
bonds during the 2006 fiscal year amounted to GH¢303.1
million, against a target of GH¢242.7 million.
The outturn for payments into the District Assemblies Common
Fund (DACF) indicate that a total amount of GH¢104.7
million, against a target of GH¢120.4 million was paid into
the DACF. The shortfall was as a result of the
underperformance of tax revenues.
Total transfers into the Ghana Education Trust Fund
(GETFund) amounted to GH¢106.3 million. The transfers were
lower than the budget estimate by GH¢32.4 million due to the
shortfall in VAT revenue for the year. The outturn however,
reflects an increase of 8.4 per cent over the outturn
recorded in 2005.
Mr Baah-Wiredu said discretionary payments for the year
totalled GH¢3,083.0 million, against a budget estimate of GH¢2,947.5
million.
Personal emoluments amounted to GH¢1,137.1 million, 13.8 per
cent more than the budget estimate.
The Minister attributed the increase expenditure to
extraordinary pressures from the labour front, which led to
higher nominal increases in the wage bill during the fiscal
year.
Administration and Service recorded an outturn of GH¢427.7
million, out of which Service expenditure amounted to GH¢125.8
million. The expenditure on Administration for the year
exceeded its budget estimate by GH¢78.6 million.
Domestically-financed investment, registered an outturn of
GH¢294.3 million, about 20.1 per cent lower than the
budgeted amount of GH¢368.2 million. Foreign-financed
investment amounted to GH¢527.9 million, GH¢278.4 million
lower than the budget estimate for the year. The lower
performance is as a result of the lower disbursements of
project loans and grants by our development partners.
Mr Baah-Wiredu said HIPC-financed expenditure was GH¢179.2
million, about 1.7 per cent lower than the budget target of
GH¢182.2 million. The outturn indicates a 8.0 per cent
increase over the outturn for the 2005 fiscal year.
A total amount of GH¢39.2 million of non-road outstanding
commitments were cleared during the course of theyear. Of
this amount, outstanding arrears of GH¢5.4 million and GH¢4.3
million were transferred into the DACF and GETFund,
respectively, as clearance of the arrears for 2006, while an
amount of GH ¢9.6 million was cleared in respect of road
arrears.
GNA
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