Dr Kofi Henry Wampah, Governor of the Bank of Ghana (BoG) on Wednesday said provisional outturn for broad fiscal performance in 2013 suggests an overall budget deficit estimated at 10.8 per cent of Gross Domestic Products (GDP).

He said the 10.8 per cent deficit was against a budget target of 9.0 per cent, following a deficit of 11.8 percent in 2012, declaring that the fiscal slippage was underpinned by shortfalls in revenue and grants, higher spending on wages and salaries as well as interest costs.

Dr Wampah, who disclosed this in Accra at the Banks Monetary Policy Committees monthly press briefing, said total revenue and grants was GH 19.2 billion, against a budget target of GH 22.5 billion.

He said of this out turn, domestic revenue amounted to GH 18.7 billion, below the target of GH 21.3 billion, adding that total tax revenues amounted to GH 14.3 billion, lower than the target of GH 17.1 billion.

He said the low tax revenue collection over the period was the result of: lower import volumes which negatively affected import taxes, decline in commodity prices on the world market which affected company taxes and mineral royalties, and the slowdown in economic activities during the first half of the year, resulting partly from the energy crisis.

The Governor pointed out that grant disbursements amounted to GH 437.6 million, short of budget target of GH 1.3 billion. He said non-tax revenues for the period amounted to GH 4.3 billion, compared to the budgeted target of GH 4 billion.

Dr Wampah said total expenditures, including payments for the clearance of arrears and outstanding commitments amounted to GH 28.6 billion, lower than the budget target of GH 30.5 billion.

He said the wage bill for the year amounted to GH 8.1 billion, against a budget target of GH 7.5 billion, almost 64 per cent of tax revenues, the highest in the West African sub region, stating that similarly, interest payments amounted to GH 4.4 billion, against a target of GH 3.2 billion.

He said these developments resulted in an overall budget deficit of GH 9.5 billion (10.8 per cent of GDP) for the year, compared to the budget target of GH 8 billion (9 per cent of GDP).

He said the deficit was financed mainly from domestic sources, resulting in a Net Domestic Financing (NDF) of GH 6.9 billion, higher than the budget target of GH 5.7 billion.

Dr Wampah noted that foreign financing of the budget amounted to GH 3.2 billion, higher than the GH 2.5 billion target.

He said provisional data for January and February (narrow basis) on the execution of the 2014 budget revealed that total revenue and grants was GH 2.4 billion (2.3 per cent of GDP) compared with GH2.1 billion (2.4 per cent of GDP).

The Governor said tax revenues amounted to GH 2.2 billion (2.1 per cent of GDP), compared to GH 1.8 billion (2 per cent of GDP) recorded in the same period in 2013.

He said governments spending (including arrears clearance), on the other hand. amounted to 4.1 per cent of GDP, and was below the 5.0 per cent of GDP recorded for the same period of 2013.

Dr Wampah observed that these developments resulted in a (narrow) budget deficit equivalent to 1.8 per cent of GDP. He said in the corresponding period of 2013, the (narrow) budget recorded a deficit equivalent to 2.7 per cent of GDP, stating that the deficit was financed entirely from domestic sources.

He said the stock of public sector debt as at the end of February this year, was GH 55.6 billion up from GH 51.6 billion in December 2013.

He said of the total public sector debt, domestic debt constituted 48.5 per cent and external debt was 51.5 per cent.