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Fiscal deficit narrows in 2011

By Kofi Ahovi
Ghana’s fiscal operations in 2011 resulted in a narrow budget deficit of GH¢2.1 billion according to data from Bank of Ghana (BoG).

The deficit was financed mainly through the issuance of domestic bonds. However, “the Net Domestic Financing (NDF) of GH¢2.1 billion was within the programmed target of GH¢2.4 billion,” data stated.

Total revenue and grants in 2011 increased to GH¢10.7 billion compared to GH¢7.5 billion in 2010. Import duties, import VAT, petroleum taxes and NHIL receipts accounted for GH¢3.5 billion. Income and property taxes were GH¢3.8 billion while domestic VAT, excise duty and NHIL amounted to GH¢1.3 billion. Programmed grants of GH¢340.6 million also accrued.

Total expenditure also increased to GH¢12.7 billion in 2011, compared to GH¢9.2 billion in 2010. Wages, salaries and related expenditures totalled GH¢5.2 billion.

In January 2012, total revenue and grants amounted to GH¢649.3 million, while expenditures were GH¢1.4 billion. This resulted in a narrow fiscal deficit of GH¢756.4 million compared to a surplus of GH¢107.7 million recorded for January 2011. The deficit was financed mainly from the domestic sector of GH¢679.9 million, and net foreign inflows of GH¢76.6 million. The NDF for January of GH¢679.9 million represents 80.6% of the first quarter target of GH¢844 million.

The stock of domestic debt increased by 43% year-on-year to GH¢11.84 billion in 2011, from GH¢8.3 billion in 2010. The external debt stock also increased by 20.1% over the end of December 2010 position to US$7.6 billion (GH¢11.77 billion).

Cumulatively, the total public debt was GH¢23.6 billion, equivalent to 44.2% of GDP at end 2011, compared to GH¢17.6 billion (38.1% of GDP) in 2010.

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