Accra, July 13, GNA - The overall budget balance for the first four months of the year (January to April) showed a deficit of C22,416.1 billion (2.2 per cent of GDP) compared with a deficit of C21,386.8 billion (1.4 per cent of GDP) in the corresponding period of 2005. Presenting the 2006 Supplementary Budget to Parliament on Thursday, the Minister of Finance and Economic Planning, Mr Baah-Wiredu said the domestic primary balance also recorded a deficit of A21,803.6 billion (1.6 per cent of GDP) compared with a surplus of A2995.4 billion (1.0 per cent of GDP) in the same period of 2005.

"These apparent relatively under-performance in the fiscal outturn compared to the same period in 2005, are not surprising because spending and disbursements in 2006 started right at the beginning of the year, as the 2006 Budget had the approval of this August House even before the year started.

"In consequence, therefore, the full implementation of the Budget started from January 1, 2006, a marked departure from previous years, where full implementation started after the passage of the Appropriations Act towards the end of March within the fiscal year. "It is expected that as the year progresses and revenue inflows pick up and external resource inflows are disbursed, the trend will be reversed to the normal path of the Budget outturn as elaborated in the 2006 Budget.

Mr Baah-Wiredu said the provisional fiscal outturn for the first four months of 2006 indicated that total receipts amounted to A211,962.2 billion, against the outturn of A29,020.1 billion registered for the same period during 2005.

This shows a 32.6 per cent increase over the outturn for the corresponding period of 2005.

Total revenue for the period under review was A26,637.8 billion, 6.4 per cent higher than the programmed amount of A26,238.7 billion and an increase of 2.2 per cent over the outturn for the same period in 2005.

Total tax revenue was A26,121.7 billion, against a programmed target of C25,675.3.

Mr Baah-Wiredu said the performance of tax revenue, however, showed a 2.5 per cent increase over the performance for the corresponding period in 2005.

Direct taxes, which comprised personal, self-employed, companies and others such as airport tax and the National Reconstruction Levy amounted to A21,802.6 billion, about 0.9 per cent lower than the outturn for the same period last year.

He said the performance in direct taxes was mainly due to the delay in assessment of companies for the year.

Indirect taxes for the period under review amounted to A23,163.6 billion showing about 9.0 per cent increase over the outturn for the corresponding period in 2005.

Mr Baah-Wiredu said the outturn for International Trade Taxes was =A21,155.6 billion indicating a shortfall equivalent to 3.9 per cent of the programmed amount of A21,202.1 billion, and 7.6 per cent lower than the outturn for the same period in 2005.

"The under performance is due to the fact that for the period under review there has not been any receipts from cocoa export duties. It is important to note that for the same period last year a total amount of =A2180.7 billion had been received as cocoa duties."

Mr Baah-Wiredu said receipts for National Health Insurance Levy (NHIL) amounted to A2365.7 billion showing a 6.9 per cent increase over the outturn for the same period in 2005.

Non-Tax Revenue for January to April amounted to A2150.4 billion; =A245.0 billion higher than the programmed target. The outturn, however, is 14.5 per cent lower than the outturn for 2005.

The Minister said total grant disbursement for the period under review amounted to A21,781.3 billion, reflecting a 41 per cent increase over the outturn for the same period in 2005.

Multilateral Highly Indebted Poor Countries (HIPC) Assistance saw an 82.4 per cent increase over the 2005 level for the same period, while programme grants recorded about 160 per cent increase over the outturn for the same period in 2005.

The outturn for project grants was C251.9 billion, about 9.7 per cent lower than the outturn for the corresponding period in 2005. Total loans amounted to C279.7 billion, implying a lower outturn of 46.3 per cent, compared to that for the same period in 2005. Project loans was below the programmed target, by C2455.6 billion, while no disbursements had been made for programme loans.

On payments, Mr Baah-Wiredu said the provisional actual outturn for total payments for the first four months of the year 2006, comprising of statutory and discretionary payments was A211,962.2 billion. This outturn compares to A29,020.1 billion for the corresponding period in 2005. Total statutory payments, which included interest payments, amortization, and transfers to households amounted to =A23,089.2 billion, 28.3 per cent lower than the programme target for the year.

External Debt Service for the period under review amounted to =A2989.5 billion. The principal component of the external debt due was =A2715.4 billion, representing a 3.6 per cent decrease over the outturn for same period in 2005.

Payments on external interest amounted to A2274.1 billion, which was higher than the outturn of A2265.6 billion during the corresponding period in 2005.

Domestic interest payments, including interests on TOR bonds, amounted to A2554.9 billion, indicating a A228.6 billion decrease over the outturn of A2777.2 billion recorded for the same period in 2005. This is as a result of the reduction in the stock of maturing treasury bills, and low interest rates resulting from the net repayment of domestic debt recorded in 2005.

The Road Fund and other Petroleum-Related Funds received a total of =A2378.8 billion, of which the Road Fund received A2368.9 billion, 33.9 per cent increase over the outturn for the same period in 2005. The outturn for payments into the District Assemblies' Common Fund (DACF) amounted to A2305 billion, indicating an increase of 18.3 per cent over the outturn for the same period in 2005, while transfers into the Ghana Education Trust Fund (GETFund) in the year under review amounted to A2241.2 billion.

He said total discretionary payments for the first four months of 2006 amounted to A28,873.0 billion.

Mr Baah-Wiredu said payments for wages and salaries during the period amounted to A22,920.0 billion, compared to A22,209.1 billion for the same period in 2005.

He said HIPC-financed Expenditure amounted to A2698.9 billion, compared to A2549.5 billion expended on HIPC-related projects and programmes during the same period in 2005.

The outturn for the HIPC-financed expenditure was higher than the programmed amount of A2348.3 billion as a result of higher than programmed inflows that materialised during the period.

Mr Baah-Wiredu said despite the shift in focus of meeting the Millennium Development Goals, it was expected that growth in the economy would enable a faster and fuller implementation of the programmes and activities that would make Ghana to achieve those goals.

He said by the end of the first quarter of the year, Government had released about A2424 billion including A219 billion for domestic debt payments, out of the expected total HIPC debt relief of A22,277.5 billion for 2006.

About C2407 billion of that amount went to Ministries, Departments and Agencies (MDAs) for the implementation of programmes and projects in the areas of Human Resource Development, Private Sector Development and Good Governance.