Sunday, 9 June 2019

Revenue shot fall poses risk to fiscal outlook

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By Elorm Desewu

Revenue challenges coupled with increased pace of spending may pose some risks to the fiscal outlook expenditure pressures have been exacerbated by payments associated with the energy sector.

These are exerting financing pressures on government and more stepped-up efforts would be required to ensure total realignment of expenditures to revenues. 

The total revenue and grants amounted to GH¢10.1 billion compared with the programmed target of GH¢12.4 billion. Total expenditures was GH¢16.5 billion, slightly below the target of GH¢17.3 billion, and representing a 37.7 percent annual growth.  

The revenue shortfalls were mainly from personal income taxes, import duties and levies, and non-tax revenues

The provisional data for the first quarter of 2019, showed an overall deficit on cash basis of 1.8 percent of GDP against the target of 1.4 percent of GDP and a primary deficit of 0.8 percent of GDP compared to a targeted deficit of 0.3 percent of GDP. The higher-than-projected fiscal deficit outturn was due to the lower-than-projected domestic revenue collections which were not accompanied by expenditure rationalization.