According to Finance Minister Dr. Cassiel Ato Forson, GH¢2.2 billion more is needed to fully capitalize the Agricultural Development Bank (ADB) and the National Investment Bank (NIB) so that they have the funds necessary to support economic stability, comply with regulations, and function efficiently.
Despite spending GH¢30.3 billion on the financial sector cleanup effort by the end of 2024, Dr. Forson noted that the nation still faces financial sector risks during his presentation of the 2025 Budget in Accra on Tuesday, March 11, 2025.
“This includes GH¢26.9 billion spending for the banks, Savings and Loans companies, Financial Houses, Micro-Finance Institutions, and Asset Management companies,” he stated.
“To address the lingering legacy concerns and new risks in the financial industry, the sector needs GH¢10.45 billion, Mr. Speaker. Furthermore, the Finance Minister stated that GH¢2.2 billion is needed to completely capitalize NIB and ADB.
Regarding fiscal performance, he observed that 2024 witnessed greater tax collection, but it was also marked by substantial expenditure overruns and the building of large arrears.
“In summary, Mr Speaker, provisional data show that the primary balance on commitment basis, the key fiscal anchor, worsened from a deficit of 0.2 per cent of GDP at the end of 2023 to a deficit of 3.9 per cent of GDP at the end of 2024, that is 4.4 percentage points worse than the target surplus of 0.5% of GDP,” he stated.
Below are his remarks regarding the budgetary performance for 2024:
ii The primary balance on a cash basis was a 1.2% GDP deficit versus a 0.6% goal deficit;
iii The 2024 commitment-based overall fiscal balance was 7.9% of GDP short of the target deficit of 4.2%, while the cash-based overall fiscal balance was 5.2% of GDP short of the target of 5.3%;
iv. At GH¢186.6 billion, or 15.9% of GDP, overall revenue and grants were 5.3% higher than the revised target of GH¢177.2 billion, or 17.4% of GDP. stronger than anticipated oil and gas receipts as well as stronger non-oil tax revenue were the primary drivers of the success;
v. The sum of all commitment-based expenses, including the difference, was GH¢279.2 billion, or 23.7% of GDP. This is 27.1 percent more than the GH¢219.7 billion fiscal allotment, or 21.5% of GDP;
vi. With the disparity included, primary expenditure on a commitment basis came to GH¢232.4 billion, or 19.8% of GDP. This exceeds the goal of GH¢171.7 billion, or 16.8% of GDP, by 35.3%;
vii. All expenditure lines, with the exception of interest payments, goods and services, and other expenditures, surpassed their respective goals for the time period; and
viii. The 2024 unclassified spending discrepancy was GH¢3.8 billion, whereas the 2023 discrepancy was GH¢12.9 billion.
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