Gov't Reviews 2015 Budget Estimates, Pegs Total Revenue at GH¢ 29.7 billion
Total revenue and grants for the 2015 fiscal year has been pegged at GH¢ 29.7 billion after an initial figure of GH¢ 32.4 billion.
New projection for Ghana’s oil revenue has also been pegged at 1.5 billion dollars after an initial figure of 4.2 billion dollars stated in the 2015 budget.
The new figure shows a 1.5 % and 64% drop from the earlier projections respectively.
These new projections follow the drop in the prices of crude oil on the world market.
Finance Minister, Mr Seth Tekper, announced the new figures in Parliament on Thursday, March 12, 2015 in a statement on the implications of the fall in crude oil prices on the 2015 budget .
The purpose of the Statement was to inform the legislators of the steps Government was taking to address the said issue to ensure that the macroeconomic objectives of Government were achieved.
He said projected revenue in oil for 2015 dropped from 4.2 billion to 1.5 billion cedis, noting that the total revenue and grants would witness a shortfall of 2.7 billion.
Prior to the review, government had planned to allocate GH¢C2.5 billion as annual budget funding amount to finance specific projects in the budget.
While GH¢1.1 billion was to be transferred into Ghana’s Petroleum Funds, GH¢ 697.7 million was to be transferred to the Ghana National Petroleum Corporation (GNPC).
According to Mr Tekper, "following global developments and market sentiments which have led several international institutions to revise their oil price projections, it is not likely that the Benchmark price estimated for 2015 will be realized."
He noted that the assessment by Government was based on a price of US$52.8 per barrel, which was consistent with the IMF forecast.
He explained that based on the new revenue assumptions, total petroleum receipts for 2015 was estimated at GH¢1.5 billion (1.1 per cent of GDP), compared with the 2015 Budget estimate of GH¢4.2 billion (3.1 percent of GDP), adding that the difference of GH¢2.7 billion is 64.4 per cent lower than the 2015 Budget target.
He said of the projected total petroleum receipts, GH¢468.9 million would be transferred to the National Oil Company in line with the PRMA and that the remaining amount of GH¢1.0 billion (0.8 per cent of GDP), would not be sufficient to cover the Annual Budget Funding Amount of GH¢2.5 billion in the 2015 Budget.
Touching on the status of the negotiations with the IMF for a Fund programme, he said government reached staff-level agreement with the Fund subject to approval by IMF Management and the Executive Board.
"The programme will be supported by a three-year Extended Credit Facility (ECF) arrangement. The proposed access to Fund resources which is for Balance of Payment support could total SDR 664 million (about US$940 million), or 180 percent of Ghana’s IMF quota," he said.
He informed the MPs that the IMF Executive Board was scheduled to meet in early April to consider and approve Ghana’s programme with the Fund.
He assured that despite the current economic challenges confronting the country the medium term prospects remain bright.
He said government would continue to work diligently to ensure that the positive prospects as well as macroeconomic stability and socio-economic objectives were not derailed by external and domestic shocks.
He also touched on Pay roll reforms and the weaning off of some state owned institutions as part of efforts to streamline government expenditure on wages and to eliminate issues with the public wage bill.