Government is expected to cough about GHC1,889,870,741 to pay interest on loans in the first quarter of 2017 calendar year.
This revelation came to light on the floor of Parliament on Thursday, 20 October, 2016 when the Parliament approved a whopping GHC10.9 billion for the country’s expenditure in advance appropriation to help finance “critical government expenditure” in the first quarter of 2017.
This follows the recommendation for the approval of the budget by the Finance Committee of the August House.
According to members of the Finance Committee, the request for the huge amount to be spent by a new government in office after the 2016 general elections was in line with Article 180 of the 1992 Constitution and Section 23 of the Public Financial Management Act, 2016 (Act 921).
“The committee has carefully considered request recommended to the House to approve the sum of GHC1,889,870,741 as expenditure in advance appropriation to finance government operations for the first quarter of 2017 financial years in accordance with Article 180 of the 1992 Constitution,” the committee members opined.
The Committee noted that the government’s request was necessitated by the “tight election calendar” which made it difficult to come out with an Appropriation Act (a comprehensive budget) before the end of 2016.
The amount earmarked for interest payment and amortisation drew sharp criticism from the minority New Patriotic Party (NPP) members of Parliament (MPs) during the debate on the floor.
Leading the onslaught was the NPP MP for the New Juaben South constituency in the Eastern Region, Dr. Mark Assibey Yeboah, who questioned the basis for the huge amount set aside to pay interest on loans which were more than the amount for goods and services.
According to him, allocation for goods and services (GHC164,220,432) was less than two per cent of the total budget whiles grant to other government units will cost GHC2.3 billion.
Meanwhile, the Minister for Finance, Hon. Emmanuel Seth Terkper, who laid the request on behalf of the President on the floor of the House, noted that all the expenditure budgeted for the first quarter of 2017 was for essential and statutory payments adding that all non-core expenses of the state would be deferred to the second quarter of 2017.
In the same vein, Hon. Terkper indicated that the finance ministry has put measures in place to raise revenue amounting to GHC8.9 billion for the first quarter of 2017.
According to the Committee’s report, out of the projected revenue of GHC8.9 billion for the first quarter, GHC7.2 billion will be from taxes ranging from income and property tax to international trade taxes.
Non-tax revenue per the Committee’s report is expected to rake in about GHC1.1 billion.