Shortfall In Revenue Collection & Uncontrolled Factors Likely To Affect Ghana's Fiscal Deficit Target


Ghana is likely to miss the fiscal deficit target of five-point-four percent of Gross Domestic Product by two percentage points.  

This follows the shortfall in revenue collection and uncontrolled factors such as crude oil prices and volume shocks on the world market.  The Minister of Finance, Seth Terkper, made this known in Accra at a media briefing on the state of the Economy. 

He said despite these challenges the economic prospects of the country remain bright as the fiscal consolidation pursued by government continues to yield fruits.

He stated that the outgoing Mahama led  administration did not use all the country’s resources for consumption only, but created buffers which can consolidate the economic stability achieved.

“We have been building some buffers that is the opposite of cleaning or emptying the coffers. If you live from hand-to mouth, you will hardly see it but if you have a mechanism for saving like we are doing through a Sinking Fund, backed by a debt service reserve and account, you will have buffers,” he argued.

Mr. Terkper’s assertion contradicts allegations made by the incoming government during the electioneering campaign that the Mahama administration has mismanaged the country’s resources.

But Mr. Terkper explained that the debt management strategy of the government has proved productive.

“The buffers we are creating are the stabilization fund, and I did mention that we have spent 250 million dollars. As we speak I believe there is about a 100 million dollars still in the stabilization fund. The sinking fund because we paid part of the ten year bond, it also has some funds. We are building buffers through the stabilization fund, heritage fund, and through the sinking fund and debt service reserve account and others, in essence the country is not living from hand to mouth,” he indicated.

He stated that contrary to acusations that the government has borrowed for consumption goods, the government rather built reserve to carter for the future.

“The country is not using all of its resources for consumption only and this how you do not drain the coffers at any point in time, there must be structural way of doing it, unlike the way these things were done in the past,” he said.

GBC