The government hopes to spend about GHC 137.5 billion in 2022, Ken Ofori-Atta, the Minister for Finance, has stated.
The estimate for 2022 represents a growth of 23.2% above the projected outturn of GH¢111.6 billion, equivalent to 25.3% of GDP for 2021.
Presenting the 2022 Budget Statement and Economic Policy of Government in Parliament on Wednesday (17 November) Ofori-Atta said: “Total expenditure (including clearance of arrears) is projected at GHC137.5 billion, equivalent to 27.4% of GDP.”
He added: “…Based on the estimates for Total Revenue & Grants and Total Expenditure, the 2022 fiscal operations will result in an overall fiscal deficit of GH¢37 billion, equivalent to 7.4 percent of GDP. This includes the financial sector and energy sector IPPs payments. This represents a nominal year-on-year reduction of about 26 percent over the projected outturn of 12.1 percent of GDP in 2021.”
Ofori-Atta said the key drivers of expenditure growth include capital expenditure, funding of key government flagship programmes, wage bill, and interest payments.
GDP growth rate
Meanwhile, the government has set the 2022 gross domestic product (GDP) growth rate at 5.6% up from the 5.1% projected in the 2021 Mid-Year Budget Review
The government originally projected the GDP growth rate in the 2021 Budget at 5.0%.
Ofori-Atta said, “Speaker, based on the macroeconomic objectives and the medium-term targets, the following macroeconomic targets are set for 2022: Overall Real GDP growth of 5.8%, non-oil real GDP growth of 5.9%, an End-December inflation rate of 8%, fiscal deficit of 7.4% of GDP, a primary surplus of 0.1% of GDP; and gross international reserves to cover not less than four months of imports.”
Total Revenue and Grants for 2022 is projected to rise to GHC100.5 billion, equivalent to 20.0% of GDP, up from a projected outturn of GHC70.3 billion, equivalent to 16% of GDP for 2021. Domestic Revenue is estimated at GHC99.5 billion and represents an annual growth of 44% over the projected outturn for 2021.
He added, “Mr Speaker, the resource mobilisation for 2022 is underpinned by revenue policy initiatives. The increase in domestic revenue by 44% is as a result of the impact of a major progressive tax policy, complemented by improvements in tax compliance and reforms in revenue administration that we have outlined in this budget.”
The minister in the 2021 Mid-Year Budget Review presented in Parliament on Thursday (29 July) 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.”
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