Parliament on Thursday approved a request for the withdrawal of an amount of GH10.99 billion from the Consolidated Fund to run the country for the first quarter of 2017.
The amount is to enable government spend between January and March 2017 pending a new budget to be read by the new government that would emerge from the 2016 elections.
It is expected to be used for compensation of employees, goods and services, capital expenditure, interest payment, grants to other government units, non-road arrears, tax refund and amortisation.
Mr. James Klutse Avedzi, Chairman of the Finance Committee, who moved the motion for the adoption of the report of the committee on the request, said the request was necessitated by the “tight election calendar” which made it difficult to come out with an Appropriation Act before the end of 2016.
He said an amount of GH 3.8 billion has been budgeted for compensation of employees, GH 1.8 billion for interest payments whilst GH 2.3 billion has been allocated to other government sectors.
Mr Avedzi added that an amount of GH 164,220,432, GH 518,456,296, GH 151,078,450 and GH 773,577,000 would also be used for goods and service, non-road arrears, tax refunds and amortisation.
He noted that the minister during its deliberations with the committee explained that all non – core expense would be deferred to the second quarter of 2017.
Mr Avedzi noted that the Ministry of Finance projected to collect a total revenue of GH8.9 billion for the same period through taxes on income and property, taxes on domestic goods and services, international trade taxes, social security contributions, non-tax revenue and grants.
He informed the House that the deficit would be financed through both domestic borrowing and external financing including projected and programme loans.
The Member of Parliament of New Juaben South, Mark Assibey-Yeboah, who seconded the motion for the adoption and approval of the estimates, questioned the huge interest payments in the budget.
He was of the view that the next government would be forced to pay GH518 million on non-road arrears and GH773 million on loan amortisation considering the current trends.
“Out of the total expenditure, about 3.3 billion, representing 29 per cent, will be spent on loan interests and amortisation while GH1.2 billion will be spent on capital expenditure. Mr. Speaker, I am only seconding the motion because the government machinery must run,” he said.
Majority Leader, Alban Bagbin, on his part said all loans contracted by government over the years had gone into developmental projects.
He noted that government never borrowed from the Bank of Ghana, adding that government throughout the years operated a zero borrowing.
He denied assertions that government sold national asserts to pay salaries of worker or balance the budget, adding that all loans went into investment in human resource development, and infrastructure development.
The Finance Minister, Mr Seth Terkper, in a reaction, pointed out that one of the cardinal things government did about borrowing was to avert row over racing by borrowing to refinance.
The expenditure which was laid under a Certificate of Urgency was approved in accordance with Article 180 of the Constitution and Section 3 of the Public Financial Management Act, 2016 (Act 921).
Source: Government of Ghana.