The government’s expenditure on employee compensation in Q3 2020 was higher than projected by GH¢ 558.6 million, an 8.7 percent point higher than the target for the period.
A total ofGH¢6,980.2 million was used to pay wages and salaries, and social security contributions in Q3 2020 as against a programmed target of GH¢6,421.6 million. The total amount committed to compensating employees between July and September last year, constitute 32.0 percent of total government Expenditure and Net Lending for the period under review.
Compared to the same period in 2019, employee compensation in the third quarter of 2020 recorded a year-on-year growth of 24.1 percent.
The recent third-quarter bulletin released by the Bank of Ghana shows that the government’s expenditure patterns were mixed in the third quarter of last year. The government overspent on some expenditure items but underspent on others.
Regarding capital expenditure, Government Acquisition of Non-Financial Assets during the third quarter of 2020 totaled GH¢2,469.0 million. This was above the budgeted target of GH¢1,672.8 million by 47.6 percent.
Total domestic financed capital expenditure for the period was GH¢1,592.8 million, constituting 64.5 percent of Capital Expenditure. Also, foreign-financed capital expenditure for the period amounted to GH¢876.2 million representing 35.5 percent of total Capital Expenditure for the period.
The latest Economic and financial data from the Bank of Ghana shows that capital expenditure now stands at 2.7 percent of GDP as of November 2020 compared to 1.7 percent of the country’s Gross Domestic Product (GDP) in November 2019.
Meanwhile, the government earmarked GH¢1.90 billion for capital expenditure in the first quarter of 2021, constituting 7.9 percent of the projected 2021 first-quarter total expenditure including the clearance of arrears of GH¢24.0 billion.
A total of GH¢6,770.0 million was spent on interest payments which were 6.0 percent below the programmed target of GH¢7,198.6 million. While Domestic interest payment which accounted for 76.0 percent of the total Interest payment missed its target by 16.1 percent, External Interest payment with a share of 24.0 percent overshot its target by 51.6 percent.
Furthermore, grants to other government units for the review period was GH¢2,644.2 million and barely missed the budgeted target of GH¢2,673.8 million by 1.1 percent. National Health Fund payment and GET Fund for the period were GH¢325.8 million and GH¢162.9 million, respectively. Payments were also made in respect of District Assemblies Common Fund of GH¢442.7 million. Retention of Internally Generated Funds and Transfer to GNPC from Oil Revenue were GH¢864.0 million and GH¢242.3 million respectively.
Overall, government expenditure and net lending for the third quarter of 2020 was GH¢21,836.1 million representing 5.7 percent of GDP. Total expenditure missed the budgeted target of GH¢24,725.0 million (6.4% of GDP) by 11.7 percent.
Most of the expenditure lines, according to the Bank of Ghana, underspent compared with their respective targets except Compensation of Employees, Goods and Services and Acquisition of Non-Financial assets which overshot their targets by 8.7 percent, 33.9 percent, and 47.6 percent respectively.
