The Minister of Finance, Seth Terkper, has asked Parliament to approve a supplementary budget of Ghc1.8 billion to run some programmes and policies for the rest of the year, 2016.
The request, according to Mr. Terkper, has been necessitated by the huge shortfalls in revenue generation.
Presenting the 2016 Supplementary Budget to Parliament on Monday, Mr. Tekper said government will need the extra cash to invest in key sectors of the economy.
The presentation, which highlighted government’s fiscal plans for the remaining six months of 2016, also emphasized government’s plans to deal with the budget deficit and overruns.
Oil shortfalls
According to the Minister, the declining price of oil, which went as low as 28 dollars per barrel against government’s benchmark of 54 dollars per barrel, negatively affected revenue projections for the first half of 2016.
FPSO shutdown
In addition, he stated that the frequent shutdown of the FPSO Kwame Nkrumah impacted on gas supply to power plants in the Aboadze enclave, forcing government to embark on contingency spending to supply crude oil for the plants to supply power.
Wapco challenges
He added that, challenges from the West African Gas Pipeline Company, during the period under review, has also resulted in erratic power supply affecting businesses.
Revenue shortfalls
According to Mr. Terkper, majority of targets set in the 2016 budget were not met.
Citing examples to support his claim, the Minister said tax revenue of 11 billion cedis fell by 6.4 percent to 10.3 billion cedis, while the cash deficit increased to 2.5 percent as against the 2.2 percent target.
IMF programme
The Minister on the floor of Parliament, further stated that, the International Monetary Fund (IMF)programme was geared towards reducing high budget deficit and “stabilize the rise of post-HIPC public debts” adding that government is on course to achieve these objectives.
According to him, Gross Domestic Product (GDP) rate grew by 3.8 in 2015, while the economy grew at 4.9 by the first quarter of 2016, compared to 4.5% in 2015.
He further stated that, the GDP ratio fell from 72% to 63% by the end of 2015.
Cedi is stable
Mr. Terkper also noted that, the currency is fairly stable and private sector confidence is bouncing back.
In 2014, government requested for GHC 3 billion to run some programmes.
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By: Marian Ansah & Lawrence Segbefia/citifmonline.com/Ghana