Government ended the first seven months of this year missing out on the amount of money it could spend as against revenue mobilized.
Government was hoping to spend almost five billion Ghana Cedis as at the end of July in its revised budget however provisional figures showed that it has spent 8.3 billion Ghana cedis which represents a little over 3 billion Ghana cedis more than what was programmed in the budget In percentage terms, this puts the budget deficit at 5 percent as at July instead of the programmed 3%.
For some the development is worrying for the economy if the trend continues. This is because the current challenges facing the economy can partly be attributed to the huge budget deficit being recorded.
These concerns have been heightened by fears that there could be some over-run especially in this election season which could worsen the situation. Meanwhile economist, Dr. Ebo Turkson has told 3FM Business News that government overspending its budget within the first seven months of 2016 was expected According to him, factors leading to overspending in election years are still persisting which will make it difficult for the government to stay within its budget.
Though IMF warned government to be cautious not to yield to pressures that will result in increasing the country’s debts, reports show that government has spent over 8 billion cedis instead of an estimated budget of 5 million cedis.
“We have this cycle of overspending during election years. Political parties make promises that they don’t even have an idea of financing it. I suspect there are a lot of projects that have not been budgeted for and it will jump our deficit level higher.
Election year excesses are things that persist in almost all our elections”, Dr. Turkson observed.
He has however implored government against loose fiscal policies during election years which he cited as accounting for overspending by governments.