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Increase oil production keeping the macro-economy on track – BoG

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By Elorm Desewu

The government’s commitment to fiscal consolidation as well as strong balance of payments outturn is expected to bring inflation down and entrench macro stability in the country.

According to the governor of the Bank of Ghana, Dr Ernest Addison higher oil production is helping the country in terms of the balance of payments.  “It’s helping us to keep a more stable currency but the Achilles heel of this economy has always been the fiscal policy and how you run your fiscal issues” he said.

He explained that, this is why the government is putting a lot of emphasis on the fiscal and the discussion about setting a deficit ceiling of five percent of GDP in the PFM Act.
The government recorded a budget deficit of 5.9 percent of Gross Domestic Product, (GDP), for 2017 against a target of 6.3 percent of GDP.

The government’s overall cash balance was negative GHC12.246 billion, much lower than the target of negative GHC12.818 billion.

However, the government’s overall balance on commitment basis resulted in a deficit of GHC10.488 billion representing a deficit of 5.1 percent of GDP as against a program of negative GHC9.07 billion which was a deficit of 4.5 percent of GDP.

The total revenue and grants for 2017 was GHC41.497 billion representing 20.2 percent of GDP. This is however slightly lower than the target of GHC43.124 billion.

The total expenditure for 2017 was GHC51.985 billion, representing 25.2 percent of GDP. This is much lower than the program target of GHC52.201 billion.

The compensation of employees which includes wages and salaries, social contributions, gratuity, pension among others was GHC16.005 billion. Interest payments on debts was GHC13.572 billion, also capital expenditure was GHC6.331 billion.

Tax refund for corporate organizations in the country was GHC1.8 billion. Arrears clearance by the government for 2017 was GHC1.758 billion which was much lower than the program target of GHC3.742 billion.

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