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2017 Budget Fiscal discipline will restore macroeconomic stability - Ken Ofori-Atta

Ken Ofori Atta said the government will restore fiscal discipline in the economy.

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Minister of Finance Ken Ofori-Atta play

Minister of Finance Ken Ofori-Atta

Minister of Finance Ken Ofori-Atta has indicated that the government of President Nana Addo Dankwa Akuffo-Addo is committed to fixing the country’s economy, which he says is in a difficult situation at the moment.

He said the government will restore fiscal discipline in the Ghanaian economy.

READ MORE: Ken Ofori Atta presents maiden Budget

Reading his maiden 2017 Budget Statement in Parliament on Thursday 2 March, he said "The country's debt stock has reached a level of approximately 73 per cent of GDP as at the end of 2016, which is in excess of the debt sustainability threshold of 70 per cent.

"This has resulted in high debt service costs with interest payments alone taking up nearly 42 per cent of tax revenue. This, together with compensation of employees, is more than the total domestic revenue, leaving no fiscal space for growth-enhancing policy programmes and expenditures.

READ ALSO: Finance Minister to focus on tax reforms and debt management

He said the government was highly optimistic about its plans and programmes for the economy.

Ken Ofori Atta noted that "Total expenditures at the end of December 2016 stood at 30.3 per cent of GDP against the target of 26.4 per cent of GDP with an outstanding stock of arrears of nearly GHS7 billion. This is at variance with the performance criteria on the non-accumulation of arrears of the 2016 fiscal year under the IMF-supported credit facility programme.

READ MORE: IMANI’s 2017 pre-budget litmus test for government

"The large fiscal slippages resulted in the fiscal deficit of 8.7 per cent of GDP on a cash basis and a 10.3 per cent on commitment basis. This is a sharp deflation from the IMF programme fiscal target of 5.3 per cent of GDP. We intend to reverse this trend and restore fiscal discipline," he said.

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