Finance Minister set to present mid-year budget review to parliament

Finance Minister, Seth Terkper, will Monday present a mid-year budget review and a supplementary budget to parliament, the last before general elections in December this year.

Mr Terkper is expected to give the strongest indication yet of government’s commitment not to overspend in an election year.

Ghana’s existing credit facility with the International Monetary Fund (IMF) will also be in sharp focus as the Minister lays out his spending plan as he seeks Parliamentary approval for a supplementary budget on the 2016 financial statement.

He will be expected to provide timelines for implementing targets set out in the 2015/2016 budget while presenting an outlook of next year’s estimates.

He will present government’s performance on the achievement of key macroeconomic indicators such as inflation, debt consolidation, interest rates and employment rates.

In addition, the budget will indicate some key economic areas in preparation of the 2017 to 2019 budgets.

According to sources close to government, Mr Terkper is expected to review most of the macroeconomic targets set out in the 2016 budget which, was presented to Parliament in November last year.

The sources say the Minister will review the growth target from 5.4 percent to about 4 percent, whiles the end-of-year inflation target of 10.1 percent as well the fiscal deficit of 5.3 percent will also be reviewed.  

The revenue target of GH¢38 billion and the expenditure target will also be revised. The benchmark price for crude oil is also expected to see some adjustment. 

The supplementary budget will also, give details on revenue raised for the first half of the year, and possibly the revised target for the rest of the year.

It also gives details on government's expenditure for the first six months of the year and the next half of 2016.

The Finance Minister will also be seeking parliamentary approval to spend new revenues that have come in as a result of the energy sector levy.

The Minister will be seeking approval to spend some funds on restructuring a substantial portion of debts owed by the Volta River Authority (VRA) and the legacy debts in the energy sector.

He will also touch on policy measures that will convince investors and donors that government is committed to stabilising the economy.

Some economist expect Mr Terkper to use the presentation to give Ghanaians an update on the International Monetary Fund's programme.

They would want to know the way forward on the proposed amendments made by the IMF to the Bank of Ghana Act, as well as an update on plans to raise the country's fourth Eurobond possibly in the last quarter of this year, Joy Online reports.