The Finance Minister presented the budget statement to cover only three months of 2021 because 2020 is an election year, with the possibility of a change in government, hence the budget for the following year must be limited to just the first quarter.
This is to prevent possible expenditure challenges in case of a change in government.
“Mr Speaker, we will require an amount of GH¢27.4 billion to carry on the services of government until the expiration of three months from the beginning of the 2021 Financial Year,” he told Parliament on Wednesday, October 28, 2020.
Ken Ofori-Atta explained that the total amount will cover government operations, such as:
1. Compensation of Employees - GH¢7,708,960,148
2 Goods and Services - GH¢1,595,571,683
3 Interest Payments - GH¢7,002,221,941
4 Subsidies - GH¢259,087,194
5 Grants to Other Government Units - GH¢4,340,216,517
6 Social Benefits - GH¢41,271,000
7 Other Expenditure - GH¢813,610,025
8 Capital Expenditure - GH¢1,903,658,408
- Total GH¢23,664,596,915
9 Arrears Clearance - GH¢350,000,000
10 Amortisation - GH¢3,419,583,605
- Appropriation - GH¢27,434,180,520
“For the purposes of the 2021 Expenditure in Advance of Appropriation, we have projected the 2021 first-quarter total revenue and grants at GH¢13.3 billion while total expenditure including the clearance of arrears is projected at GH¢24.0 billion. This results in the projected fiscal deficit of GH¢10.7 billion for the period,” he said.
He revealed further that to support the 2021 budget and liability management, his Ministry plans to source funding from the international capital market.
According to the Minister, the sourcing of funds from the international market will include the issuance of sovereign bonds of $3 billion, with the option to increase it to $5 billion, if market conditions are favourable.
He said out of this amount, $1.5 billion will be used to support the 2021 budget and $3.5 billion for liability management.
Finance Minister, Ken Ofori-Atta