Gov’t spends GH¢27.4bn in Q1 2021 as it plans to raise US$3.0bn Eurobond

Adnan Adams Mohammed

The Finance Minister has estimated an expenditure amount of GH¢27.4 billion for the first quarter of 2021.

During the budget presentation, which is known as the ‘Expenditure in Advance of Appropriation’ forms part of a mandated practice usually conducted in election years, the minister pleaded parliament to approve by resolution, the withdrawal of the sum of twenty-seven billion, four hundred and thirty-four million, one hundred and eighty thousand, five hundred and twenty Ghana cedis (GH¢27,434,180,520.00) from the Consolidated Fund.

The request made by the Finance Minister is intended to prevent transitional encounters in the affairs of the central government for the first three months after the general election. The Public Financial Management Act (2016) requires the Finance Minister to present the budget for the upcoming year to Parliament for approval before that year begins.

 

“This is for the purpose of meeting expenditure necessary to carry on the services of the government in respect of the period expiring three months from the beginning of the financial year or on the coming into operation of the Appropriation Act in respect of the 2021 financial year,” Ken Ofori-Atta said in parliament last week.

 

Also, the Government plans to raise up to US$3 billion in Eurobond issuance in first quarter 2021 to finance the budget overrun with the option to increase it to US$5 billion should market conditions prove favourable.

 

Out of the amount to be raised, he said, US$1.5 billion will be used to support the 2021 budget and US$3.5 billion for liability management.

 

According to the minister, the government is optimistic that favourable market conditions will allow it to raise the Eurobond up by another US$2 billion from the initial US$3 billion planned issuances.

 

“Of the total amount to be raised US$1.5 billion will be used to support the 2021 budget and US$3.5 billion to cater for the government’s debt obligations”

 

The budgeted GH¢27.4 billion required by the government is to cover Compensation of Employees, ex gratia awards, Interest and Amortization payments, transfers to Statutory Funds, critical programmes and Goods and Services, and Capex allocations of MDAs,” he said.

 

“The programmes include work on the (Agenda 111) District and Regional Hospitals, which commenced in 2020 to ensure health facilities are available in all deprived places. Currently, 88 site plans have been submitted by the district assemblies and contractors and consultants are being procured. The rehabilitation of the Effia Nkwanta and Accra Psychiatric hospitals and the construction of the two Psychiatric hospitals in Kumasi and Tamale will be fast-tracked. Funds have also been provided to facilitate the reopening of schools in the early part of 2021 if we continue to keep the spread of new infections of the COVID-19 virus at its current low levels.

 

“In furtherance of Government’s TVET agenda, next year will witness the start of the JOBS and SKILLS project to support apprenticeships and competency-based training curriculum development in over 100 trade areas and entrepreneurship.

 

“Also, we will see the beginning of construction of our flagship State of the Art TVET centres (two per region), fully equipped with modern training facilities in 33 trades/professions across 11 economic sectors”, the minister noted.