Government has revised upwards all budget inflows denominated in foreign currency and 2014 total expenditure estimates due to the current exchange rate depreciation.
As a result, the 2014 revenue and expenditure estimates have been revised to reflect developments in both the domestic and global environment and the fiscal performance for the first half of the year.
This was announced by Finance Minister Seth Terkper when he presented the mid-year review of the budget statement and economic policy review and supplementary estimates for the 2014 fiscal year to Parliament on Wednesday.
He said that total revenue and grants for the 2014 fiscal year have been revised upwards from GH¢26,056.5 million to GH¢26,230.3 million, equivalent to 22.9 percent of GDP, representing an increase of 34.7 percent over the outturn for 2013.
And the estimate for total expenditure and arrears clearance have been revised upwards by GH¢1,331.1 million from GH¢35,027.3 million to GH¢36,358.3 million (31.7 percent of GDP) mainly on account of higher wages and salaries, interest payments, foreign-financed capital expenditures and subsidies.
The Minister said that due to factors such as the slowdown in economic activity, delays in the implementation of some revenue measures announced in the Budget and the declining gold prices that have impacted negatively on taxes on domestic goods and services as well as taxes on income and property, total non-oil tax revenue have been revised downwards by GH¢948.0 million to GH¢18,712.3 million, equivalent to 16.3 percent of GDP.
The revised non-oil tax revenue for the year represents an increase of 38.1percent over the outturn for 2013.
He said that owing to the exchange rate depreciation, oil revenue have also been revised upwards by GH¢707.1 million to GH¢2,416.5 million and grants have been revised upwards from GH¢1,130.7 million to GH¢1,390.8 million, adding that there were positive ongoing discussions with Development Partners to honour some to their commitments.
The Minister said wages and salaries have been revised upwards from GH¢8,967.8 million to GH¢9,218.9 million as a result of the salary adjustments that was approved for public sector employees.
He said on the account of higher interest rates and the depreciation of the cedi, interest payments have been revised upwards from GH¢6,178.6 million to GH¢7,884.7 million.
Foreign-financed capital expenditure has also been revised upwards from GH¢4,525.8 million to GH¢4,748.7 million as a result of the exchange rate depreciation.
Mr Terkper told the House that due to the slower-than-expected implementation of utility and petroleum price adjustments, the provision made for subsidies in the 2014 budget have been revised upwards from GH¢50.0 million to GH¢618.8 million.
Also, based on the revisions made to the estimates for VAT revenue and total tax revenue in general, transfers to the National Health Insurance Fund, the Ghana Education Trust Fund and the District Assemblies Common Fund are estimated to be lower than earlier projected by GH¢21.8 million, GH¢27.4 million and GH¢54.0 million, respectively.
Transfers to the Ghana National Petroleum Corporation from the country’s oil revenue have also been revised upwards from GH¢423.7 million to GH¢599.0 million due to the higher estimated revenue from oil.
The Finance Minister said that because of the estimated higher spending on wages and salaries, interest payments and subsidies, estimated spending on Goods and Services have been revised downwards from GH¢1,550.0 million to GH¢1,085.0 million and domestic financed capital expenditure have been revised downwards from GH¢1,491.5 million to GH¢1,241.5 million. GNA