News:
March 5, 2013
Government has emphasized its commitment to tackle the main fiscal challenge which has manifested its self in a high fiscal deficit.
According to government, sources of the excess deficit are known and include shortfalls in Corporate Income Taxes, notably from the petroleum sector- GH 708.2 million (1.0% of GDP), shortfalls in grants from development partners- GHs389.4 million (0.5% of GDP), and implementation of Single Spine Salary Structure- GHs 1.91 billion (2.7 % of GDP).
The rest are high interest cost- GHs245.0 million (0.3% of GDP), utility and fuel subsidies GHs 339.0 million (0.5% of GDP) and higher spending on goods and services which is already constrained by other expenditures- 354.7 million (0.5% of GDP).
Presenting the budget on the floor of Parliament house on Tuesday, Finance Minister Seth Terkper stated that as part of the corrective measures to be undertaken, in January 2013, the NPA announce an adjustment in petroleum prices to a reasonable level that is still below the full cost.
He noted that government will take seriously, the suggestions to implement a periodic upward or downward adjustment to avoid several destruction to public and private sector output and financial planning.
Hon Terkper added that government will continue to identify credible sources of financing infrastructure project to curtail costfully and Adhoc short term borrowing, noting that the purpose is to curtail over reliance on short term instrument such as treasury bills, finance per capital budget and deficit.
He indicated that government will endeavor to maintain a stable macro-economic and dept service record in other to tap into the 10 year bond and loan market, adding that this will give pressure on credit to the private sector and help reduce interest rate.
Kwadwo Anim/GhanaMPs.gov.gh