The Bank of Ghana (BoG) in its latest Monetary Policy Report has revealed that the government in 2021 spent an amount of GHC33,619.3 million on interest payments alone higher than the projected target of GHC32,528 million.
The January 2022 report further indicated that domestic interest payments accounted for 78.9 percent of the total interest payments, while external interest payments constituted the remaining 21.1 percent.
While total interest payments constituted 50.4 percent of domestic revenue, up from 45.6 percent in the corresponding period of 2020.
Meanwhile, total expenditures and arrears clearance for 2021 was GHC110,401.70 million, thus, 25.1 percent of Gross Domestic Product (GDP), below the target of GHC113,750.23 million, about 25.9 percent of GDP.
This outturn was 97.1 percent of the target and represented year-on-year growth of 10.3 percent.
Compensation of employees
According to the Central Bank report, compensation of employees (including wages and salaries, pensions and gratuities, and other wage-related expenditure) totalled GHC31,663.3 million, and that was higher than the target of GHC31,490.8 million.
In terms of fiscal flexibility, the compensation of employees constituted 47.5 per cent of domestic revenue mobilised at the end of 2021.
This was lower than the 52.4 per cent recorded in the corresponding period of 2020.
Also, the report indicated that the use of Goods and Services for the period under review was GHC8,624.1 million, higher than the expected target of GHC8,523.2 million.
The outturn was 1.2 percent above the target and also represented a year-on-year decline of 16.7 percent.
Grants
“Grants to other Government units made up of National Health Fund, Education Trust Fund (GET Fund), Road Fund, Energy Fund, District Assemblies Common Fund (DACF), Retention of IGFs, Transfer to GNPC and other earmarked Funds, all summed up to GHC13,314.2 million,” the report said.
This was lower than the envisioned target of GHC18,081.4 million and represented a shortfall of 26.4 percent.
It, however, recorded a year-on-year growth of 12.1%.
Capital expenditures
Capital expenditures of GHC15,541.5 million (3.5 percent of GDP) for the review period was higher than the envisaged target of GHC12,222.1 million, about 2.8 percent of GDP by 27.2 percent.
This outturn, the report said represented year-on-year growth of 28.6 percent. Foreign-financed capital expenditure accounted for 65.7 percent of the total, with domestic financed capital expenditure making up the remaining 34.3 per cent.
Other expenditures, made up of ESLA Transfers and COVID-19 related expenditure for 2021, totalled GHC4,537.7 million. This was about 33.2 percent below the target of GHC6,791.9 million.
Non-tax revenue
Non-Tax revenue for the period under review was GHC7,369.34 million, representing 71.5% of the target. The outturn represented year-on-year growth of 10.5 per cent.
The underperformance was largely due to lower than budgeted lodgments and retentions, resulting mainly from lower collection efforts by some Ministries, Departments and Agencies (MDAs).
The report said the lower dividend payments against budgeted targets also contributed to this development.
Other revenue measures made up of ESLA proceeds, COVID-19 Levy, as well as Sanitation and Pollution Levy, raked in a total of GHC3,706.1 million.
This fell short of the target of GHC4,205.1 million by 11.9 percent
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